Costamare (CMRE) Q2 Earnings call transcript Jul 31, 2024
Costamare Inc.'s latest earnings call, led by Chief Financial Officer Gregory Zikos, highlighted the company's robust financial health and strategic growth initiatives in the container shipping and dry bulk sectors. With a net income of $91 million and liquidity above $1.1 billion, the company is well-positioned to capitalize on growth opportunities in both sectors.
Strategic Chartering and Fleet Management
In the containership sector, Costamare has been proactive in chartering seven new containerships for a minimum period of 2 to 3 years, generating incremental contracted revenues of above $220 million. This strategic move not only underscores the company's confidence in the market's upward trajectory but also positions Costamare to benefit from the short supply of prompt tonnage. The fleet's employment stands at 100% for this year and 88% for 2025, with a total contracted revenue of $2.4 billion.
On the dry bulk side, Costamare is focused on renewing its owned fleet and increasing its average size. The company has concluded the sale of one 2011-built Handysize and agreed to the sale of one 2009-built Supramax vessel while simultaneously acquiring two 2012-built Capesize ships. This strategic approach reflects Costamare's long-term commitment to the dry bulk sector, which has been a key decision for the company.
CBI and Neptune Maritime Leasing
Costamare's trading platform, CBI, is commercially managing a fleet of 54 ships, the majority of which are on index-linked charter agreements. This strategic move aligns with the company's focus on risk management and market fluctuations. Additionally, Neptune Maritime Leasing, Costamare's leasing platform, has been steadily growing, having funded 25 shipping assets for a total amount of approximately $285 million. This growth underscores the platform's success and the healthy pipeline of potential investments.
Market Outlook and Future Prospects
Despite the challenges posed by the continuous injection of new building capacity, charter rates in the containership markets have remained stable, with the idle fleet remaining at low levels of 0.6%. The company's strategic chartering and fleet management, coupled with its cash position of over $1.1 billion, positions Costamare to capitalize on growth opportunities in both the containership and dry bulk sectors. The company's flexibility to adopt a mix of fixed and index-linked charters, along with its use of FFAs as hedging tools, underscores its risk management strategies.
In conclusion, Costamare Inc.'s earnings call highlights the company's robust financial health and strategic growth initiatives. With a focus on chartering and fleet management, Costamare is well-positioned to capitalize on the upward trajectory of the container shipping and dry bulk sectors. The company's strategic approach to risk management, coupled with its flexible chartering strategies, positions Costamare for future growth and success.