Costamare Q4 2024 Earnings Report

Costamare EPS Results

• Actual EPS: $0.69
• Consensus EPS: $0.66
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: N/A

Costamare Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $404.27 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Costamare Announcement Details

• Quarter: Q4 2024
• Date: 2/5/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, February 5, 2025
• Conference Call Time: 8:30AM ET

Costamare (NYSE:CMRE) is a leading owner and manager of containerships, specializing in the acquisition, chartering and operation of modern container vessels. The company secures employment for its fleet under a mix of long‐term and short‐term agreements, providing vital capacity to major shipping lines and leveraging fixed-rate charters to support cash flow stability.

Founded in 1974 and headquartered in Athens, Greece, Costamare has cultivated a disciplined approach to fleet renewal, often overseeing newbuild supervision and shipyard coordination to ensure vessels meet performance and environmental standards. The company also engages in sale‐and‐purchase transactions, optimizing its portfolio in line with market conditions and strategic objectives.

Costamare’s fleet encompasses a range of vessel sizes—from standard feeders to Panamax and post-Panamax ships—allowing it to serve diverse trade routes and cargo requirements. In addition to vessel ownership, the company maintains comprehensive technical management and crew services through affiliated management firms, ensuring high levels of operational efficiency and safety.

With an international presence spanning Asia, Europe and the Americas, Costamare operates offices in key maritime centres including Athens, Monaco and New York. The company’s seasoned management team brings decades of industry expertise, guiding chartering strategies and fleet development to meet the evolving demands of global trade.

Costamare Q4 2024 Earnings Call Transcript

Key Takeaways

• The company reported a fourth-quarter adjusted net income of $82 million and full-year adjusted net income of ~$330 million, while maintaining liquidity of ~$940 million after repaying a $100 million bond and redeeming $115 million in preferred stock.
• On the container-ship side, Costa Mare secured 12 forward charters averaging 2.5 years for estimated revenues of ~$330 million, with 96% of 2025 revenue days fixed and total contracted revenues of $2.4 billion over a 3.4-year weighted duration.
• In the drybulk segment, spot rates hit their lowest levels of 2024 amid oversupply and weak China steel demand; the company acquired one Capesize and two Ultramax vessels and disposed of smaller ships to upgrade and enlarge its fleet.
• Costa Mare improved its funding structure by arranging ~$340 million of new financing for 36 of 38 drybulk vessels and securing a $100 million acquisition facility, reducing costs and extending maturities.
• The Neptune maritime-leasing platform now has over $500 million in investments and commitments (with $123 million deployed), reflecting a robust pipeline and growth potential in the leasing business.

Presentation

[Operator]

Thank you for standing by, ladies and gentlemen, and welcome to the Costamare Inc Conference Call on the fourth quarter 2024 financial results. We have with us Mr. Gregory Zikos, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you were to ask a question, please press star then one on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today, Wednesday, February 5th, 2025. We would like to remind you that this conference call contains forward-looking statements. Please take a moment to read slide number two of the presentation, which contains the forward-looking statements. We'll pause one moment. Thank you. I will now pass the floor over to your speaker today, Mr. Zikos. Please go ahead, sir.

[Gregory Zikos, CFO at Costamare Inc]

Thank you and good morning, ladies and gentlemen. During the fourth quarter of the year, the company generated adjusted income of about $82 million. Our liquidity stands at around $940 million after repaying during the year a fixed-rate bond of $100 million and also redeeming the Series E Preferred Stock of $115 million. In the containership sector, the Red Sea crisis led to diversions via the much longer Cape of Good Hope route. These diversions, together with strong cargo demand, absorbed the incremental newbuilding capacity. The commercial idle fleet remained low during 2024 and at the start of 2025. Should, however, lines gradually return to the Suez route, the release of tonnage combined with newbuilding capacity could potentially distort the current supply and demand dynamics.

[Gregory Zikos, CFO at Costamare Inc]

During this quarter, we chartered on a forward basis 12 containerships with an average time chartered duration of about two and a half years and estimated contracted revenues of close to $330 million. The containership fleet employment stands at 96% and 69% for 2025 and 2026, respectively. Total contracted revenues amount to $2.4 billion, with a remaining time chartered duration of about 3.4 years. On the dry bulk market, chartered rates dropped to their lowest levels of 2024 during the last quarter and have started 2025 on a similar rate soft note. The easing of congestion, along with pressures in the China steel market and less grain ton-mile demand, have resulted in tonnage oversupply.

[Gregory Zikos, CFO at Costamare Inc]

As per our strategy to renew the owned fleet and also increase its average size, during the quarter, we concluded the acquisition of one Capesize and two Ultramax vessels, as well as the disposal of one Handysize ship, while we have agreed to sell one Panamax vessel. CBI today manages a fleet of 51 ships, the majority of which are on index-linked chartering agreements. As mentioned in the past, we have a long-term commitment to the sector, and we view the vessel owning and the trading platform as highly complementary activities. Finally, with regards to Neptune Maritime Leasing, the platform continues to grow with a healthy pipeline, having total investments and commitments exceeding $500 million. Moving now to the slide presentation. On slide three, you can see our annual results. Net income was above $290 million or $2.44 per share.

[Gregory Zikos, CFO at Costamare Inc]

Adjusted net income was around $330 million or $2.76 per share. Our liquidity stands above $940 million. Slide four. On the chartering side, we have chartered on a forward basis 12 containerships with incremental contracted revenues of around $330 million. Our revenue days are fixed 96% for 2025 and 69% for 2026, while our contracted revenues are $2.4 billion, with a TEU-weighted remaining duration of 3.4 years. As you will notice, we have chartered three 1996-built vessels for a period at healthy rates. Turning to slide five, regarding our S&P activity, we have concluded the acquisition of one Capesize and one Ultramax dry bulk and two Ultramax dry bulk vessels. In parallel, we have concluded the sale of one Handysize ship and agreed to sell one Panamax vessel. Slide six.

[Gregory Zikos, CFO at Costamare Inc]

We have concluded finances for a total amount of circa $340 million, with respect to 36 of the 38 dry bulk vessels we currently own. The new financings provide us with improved funding costs and extension of maturities. In addition, we have secured a new hunting license of $100 million for financing of the acquisition of dry bulk vessels. Slide 7. Regarding CBI, we have chartered in 51 period vessels, with the majority of the fleet being on index-linked agreements. On our leasing platform, we have already invested around $123 million. Slide 8. Our liquidity stands above $940 million. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis. Moving to Slide 9, charter rates in the container market remain at firm levels.

[Gregory Zikos, CFO at Costamare Inc]

The continued injection of new building capacity, along with the rerouting via the Red Sea and Suez Canal, may, however, affect current market dynamics. The idle fleet remains at low levels at around 0.6%. And finally, on slide 10, you can see the recent dry bulk market trends in the spot and forward markets. Charter rates have extended their decline from 24 into the first quarter of 2025. The order book starts at around 11% of the total fleet. With that, we can conclude our presentation, and we can now take questions. Thank you. We can take questions now.

[Operator]

We will now begin the question and answer session. As a reminder, if you would like to ask a question, please press star then one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star then two. We will pause momentarily to assemble our roster. Our first question today comes from Ben Nolan of Stifel. Please go ahead.

[Ben Nolan, Managing Director at Stifel]

Thank you, Albert. Good morning, Greg, or afternoon.

[Gregory Zikos, CFO at Costamare Inc]

Good morning.

[Ben Nolan, Managing Director at Stifel]

Yeah. I wanted to ask really maybe a couple of questions about CBI, really. And first of all, can you give any sense as to what the contribution was in the fourth quarter from CBI? And then maybe more importantly, as we look forward, given where the dry bulk market is at the moment, given sort of where the forward curve is, any sense as to sort of what you would imagine the profit or the contribution from that business would be like should the market remain sort of soft as it is at the moment over the course of the year?

[Gregory Zikos, CFO at Costamare Inc]

Yeah, a couple of things. First of all, let me start from the latter regarding the weak market where it is today. It is weak today. I mean, it started from Q4 of 2024, and this is the case for Q1 2025. At the same time, there is some seasonality bit in there, which it remains to be seen. The forward curves are pointing to a better market going forward. However, CBI can also take long and short positions. I mean, we are by default long in the owning of the vessels of the 38 dry bulk ships we own. So CBI can either be long or sort of it can be short depending on the circumstances. The goal for CBI, because by default this business is very volatile, is to have a balanced book, at the same time take some positions, either short or long, depending on the circumstances.

[Gregory Zikos, CFO at Costamare Inc]

We, as mentioned in my commentary, view it as a complementary activity to the owning side. We don't aim going forward to take big positions at the CBI level, except when we have a conviction where the conditions justify those big positions. Otherwise, we will be taking a view of the market. However, it's going to be on a more balanced approach. For the owning vessels, as you've seen, by default, as mentioned, we are long. We are selling older ships and smaller vessels, and we are focusing on large assets, especially Capesize. Depending on the market conditions, we may continue doing so. The goal is whatever equity we are releasing from the vessels we dispose of, buying hopefully at low market levels, younger ships with larger tonnage.

[Gregory Zikos, CFO at Costamare Inc]

Now, regarding the contribution of CBI, and the same applies for the dry bulk owned fleet and for the containerships, I'm afraid you will have to wait on our segmental reporting in the 6-K. This is something that we will be providing some information on them relatively soon. So if you bear with me, the full information available will be there if that's okay with you.

[Ben Nolan, Managing Director at Stifel]

Okay. Yeah, no, that's helpful. And just to clarify, for 2025, you expect the CBI chartered-in fleet to be roughly net neutral, so there's no sort of current position either long or short?

[Gregory Zikos, CFO at Costamare Inc]

Oh, today we have a position. We have a position, and as we move ahead, those positions we may close them depending on market conditions. We do have a position now, but I mean, in general, our goal is first to have a balanced book and then going forward maintain that balanced book and, of course, take some positions because this is part of the business. But those positions are going to be on a more balanced approach. It could be shorter, and we wouldn't expect to take long positions without having, as mentioned, a conviction that conditions justify those bets. So compared to how CBI was operating at initiation a couple of years ago, going forward, we would expect this to have a much more balanced approach, which makes sense.

[Ben Nolan, Managing Director at Stifel]

Okay. And you said you had a position. At the moment, it's net long or short?

[Gregory Zikos, CFO at Costamare Inc]

In the moment, it's long. I mean, depending for Capes and for Panamaxes, it's long, but this is a position which, I mean, it is a long position, but it goes for periods. So it's not something that we cannot work on over the next quarters.

[Ben Nolan, Managing Director at Stifel]

Okay. All right. I appreciate it. Thank you, Greg.

[Gregory Zikos, CFO at Costamare Inc]

Thank you.

[Operator]

Our next question comes from Climent Molins of Value Investor's Edge. Please go ahead.

[Climent Molins, Head of Shipping Research at Value Investor's Edge]

Good afternoon. Thank you for taking my questions. I wanted to start by asking about how chartering discussions have evolved on the container ship side over the past few weeks as the normalization of the Red Sea seems closer. Some liners have announced they do not plan to return to the Red Sea in the near term, but have you seen an effect on rates and durations when discussing potential contracts?

[Gregory Zikos, CFO at Costamare Inc]

Yeah, thank you for the question. First of all, the 12 chartering agreements we have now disclosed. Discussions took place some months ago before the announcement of the ceasefire. So this is something which those deals, it takes time to conclude. So these were discussed two to three months ago. However, coming to where we are today, up to now, and it is a bit premature, I would say, we don't see any pressure in charter rates. Not at all. And the normalization of the trade routes through the Suez Canal, it may take some time. So we will just sit and wait. I cannot predict when we're going to be back to normality, what it's going to be over the next two, three, four quarters, sooner or later. It is quite a fragile situation.

[Gregory Zikos, CFO at Costamare Inc]

For the time being, charter rates and asset values hold at levels similar to the levels we saw some months or some quarters ago.

[Climent Molins, Head of Shipping Research at Value Investor's Edge]

That's helpful. Thank you. I also wanted to ask about Neptune Maritime Leasing. Your investment in the company has been stable over the past few quarters. Could you talk a bit about the pipeline Neptune has and whether you plan additional investments over the coming quarters?

[Gregory Zikos, CFO at Costamare Inc]

Yeah, there is a pipeline. As I said, it has a pipeline total, I mean, current financings with total future commitments, it is in total close to $500 million. Now, our cash outflow or our investment to Neptune, it's also a function of what levels of back leverage Neptune will be receiving, whether the Neptune funding is going to be 100% with equity from the shareholders and/or with back leverage from other financial institutions, which is something we take on a case-by-case basis. So I'm afraid I cannot provide with any prediction about how much additional equity as shareholders we're going to be putting to Neptune, which depends on the leverage we're going to be getting. But there is a pipeline. There are currently deals not yet committed, but under discussion. And whenever we feel that transactions make sense, we are more than willing to utilize our equity.

[Gregory Zikos, CFO at Costamare Inc]

If we can optimize our returns with additional back leverage, this is something we will consider as well.

[Climent Molins, Head of Shipping Research at Value Investor's Edge]

Makes sense. Thanks for the call. That's all from me. Thank you for taking my questions.

[Gregory Zikos, CFO at Costamare Inc]

Thank you.

[Operator]

This concludes our question and answer session. I would like to hand things back over to Mr. Zikos for any closing remarks.

[Gregory Zikos, CFO at Costamare Inc]

Thank you all for dialing in today's call. We are looking forward to speaking with you again in the next quarterly results call. Thank you.

[Operator]

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

Participants

Executives

• Gregory Zikos, CFO

Analysts

• Climent Molins, Head of Shipping Research at Value Investor's Edge
• Ben Nolan, Managing Director at Stifel