Costamare Inc. reported unaudited financial results for the fourth quarter (“Q4 2021”) and year ended December 31, 2021.
I. RECORD PROFITABILITY FOR Q4 2021 AND YEAR ENDED 2021
- Year end Net Income available to common stockholders of $404.1 million ($3.28 per share).
Q4 2021 Net Income available to common stockholders of $153.4 million ($1.24 per share).
- Year end Adjusted Net Income available to common stockholders1 of $289.9 million ($2.36 per share).
Q4 2021 Adjusted Net Income available to common stockholders1 of $112.1 million ($0.91 per share).
- Year end liquidity of $552 million.
II. SPECIAL DIVIDEND
The Company has decided to declare a special dividend of $0.50 per common share. The special dividend will be in addition to the regular first quarter 2022 dividend and will be paid at the same time as, and using the same record date as, the regular first quarter 2022 dividend.
III. SALE AND PURCHASE ACTIVITY
Vessels Disposals
- Agreement for the sale with forward delivery of the below two containerships (average age 21 years):
c/v Maersk Kalamata, 2003-built, 6,644 TEU capacity (latest expected date for the conclusion of the sale in Q1 2023).
- c/v Sealand Washington, 2000-built, 6,648 TEU capacity (latest expected date for the conclusion of the sale in Q1 2023).
- Total gross sale proceeds are estimated to be $150 million, resulting in an estimated capital gain of $95 million.
- Agreement for the sale with forward delivery of the below three containerships (average age 22 years):
c/v Sealand Michigan, 2000-built, 6,648 TEU capacity (latest expected date for the conclusion of the sale in Q4 2022).
- c/v Sealand Illinois, 2000-built, 6,648 TEU capacity (latest expected date for the conclusion of the sale in Q4 2022).
- c/v York, 2000-built, 6,648 TEU capacity (latest expected date for the conclusion of the sale in Q4 2022).
- Total gross sale proceeds are estimated to be $183 million, resulting in an estimated capital gain of $109 million.
- Agreement for the sale of the 1997-built, 2,458 TEU containership Messini. The sale is expected to be concluded in Q1 2022 and will result in an estimated capital gain of $17.8 million.
- Conclusion of the sale of the 2002-built, 4,992 TEU containership ZIM New York, which resulted in a capital gain of approximately $14.0 million.
- Total estimated capital gains from vessel disposals of $235.8 million.
Vessels Acquisitions
- Accepted delivery of the 2008-built, 4,578 TEU containership Dyros (ex. Co Kobe), which commenced its time charter with Maersk for a period of between 24.5 to 27.5 months. The vessel acquisition price was $20.0 million.
- Accepted delivery of another 11 dry bulk vessels (total delivered fleet of 45 vessels), with one additional vessel expected to be delivered in Q1 2022.
IV. NEW CHARTER ARRANGEMENTS3
Entered into a total of 35 chartering agreements for our containerships with contracted revenues of $1.4 billion in the aggregate since the beginning of 2021, bringing our contracted revenues to a total of $3.4 billion with a weighted average remaining time charter duration of 4.2 years4.
Selected fixtures of the Company’s containerships since last quarter are shown below:
- Charter on a forward basis with latest delivery to the charterer in Q4 2023, three 1996-built vessels ranging between 7,400 to 8,000 TEU capacity, for a minimum fixed period of 36 months at a daily rate of $41,500 each. More specifically:
- c/v Kure of 7,403 TEU capacity and latest delivery to its new charterers in August 2023.
- c/v Maersk Kleven of 8,044 TEU capacity and latest delivery to its new charterers in October 2023.
- c/v Maersk Kotka of 8,044 TEU capacity and latest delivery to its new charterers in October 2023.
- Charter on a forward basis with latest delivery to the charterer in Q4 2022, two 2003-built vessels of 6,500 TEUs for a minimum fixed period of 36 months at a daily rate of $53,000 each. More specifically:
- c/v Maersk Kolkata of 6,644 TEU capacity and latest delivery to its new charterers in October 2022.
- c/v Maersk Kingston of 6,644 TEU capacity and latest delivery to its new charterers in October 2022.
- Charter on a forward basis with latest delivery to the charterer in Q2 2023, two 2009/2010-built vessels of 4,250 TEUs for a minimum fixed period of 60 months at an average daily rate of $43,250 each. More specifically:
- c/v Vela of 4,258 TEU capacity, latest delivery to its new charterers in April 2023 and at a daily charter rate for the first year of employment at $99,000.
- c/v Vulpecula of 4,258 TEU capacity, latest delivery to its new charterers in May 2023 and at a daily charter rate for the first year of employment at $99,000.
Total contracted revenues from the above seven fixtures amount to $410 million extending over the next six years5.
V. NEW DEBT FINANCING AND CAPITAL STRUCTURE
New financing agreements / amendments to existing financing agreements since last quarter in excess of $430 million. More specifically:
- In December 2021, we signed a loan agreement with a leading European financial institution for an amount of up to $55 million for the purposes of refinancing the then existing indebtedness of five dry bulk carriers. The new facility has a tenor of five years, and will mature in January 2027.
- In December 2021, we signed a loan agreement with a leading European financial institution for an amount of up to $43.5 million for the purposes of refinancing the then existing indebtedness of four dry bulk carriers. The new facility has a tenor of five years, and will mature in December 2026.
- In December 2021, we signed a hunting license loan agreement with a European financial institution for an amount of up to $100 million for the purposes of financing the acquisition cost of dry bulk vessels. The availability period of this facility expires in December 2022, an amount of $56.7 million has already been drawn and the facility has a maximum tenor of 5 to 6 years following the expiration of the availability period.
- In December 2021, we extended the availability period of the $150 million hunting license loan facility agreement, originally signed in September 2021. The new availability period expires in June 2022.
- In January 2022, we signed a loan agreement with a leading European financial institution for an amount of up to $85 million for the purposes of refinancing the then existing indebtedness of five containerships and for general corporate purposes. The new facility has a tenor of four years and will mature in January 2026.
VI. SHARE REPURCHASE PROGRAM AND DIVIDEND ANNOUNCEMENTS
- On November 30, 2021, we approved a share repurchase program of up to a maximum $150 million of our common shares and up to a maximum $150 million of our preferred shares. The timing of repurchases and the exact number of shares to be purchased will be determined by the Company’s management, in its discretion.
- On January 3, 2022, we declared a dividend for the quarter ended December 31, 2021, of $0.115 per share on our common stock, which was paid on February 7, 2022, to stockholders of record of common stock as of January 20, 2022.
- On January 3, 2022, we declared a dividend of $0.476563 per share on our Series B Preferred Stock, of $0.531250 per share on our Series C Preferred Stock, of $0.546875 per share on our Series D Preferred Stock and of $0.554688 per share on our Series E Preferred Stock, which were all paid on January 18, 2022 to holders of record as of January 14, 2022.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
“2021 has been a record year for Costamare. With a fleet of 123 vessels, including 46 dry bulk ships, the Company generated Net Income of above $400 million. As of the end of the year, liquidity stood at $550 million.
On the containerships side, market conditions remained firm with strong demand and logistical disruptions continuing to impact the sector. We chartered a total of 35 secondhand vessels during the year, which added incremental contracted revenues of $1.4 billion. Total contracted revenues amount to $3.4 billion with a weighted average remaining time charter duration of about 4 years.
We have covered substantially all of our containership open days for 2022 and are in the process of arranging employment for the vessels coming off charter next year. At the same time, we agreed to dispose of some older tonnage with forward, year-end deliveries at prices that reflect today’s tight market environment.
Regarding our expansion into the dry bulk shipping business, we entered a market with favorable supply and demand dynamics underpinned by a historically low orderbook. Our dry bulk fleet is currently trading in the spot market generating healthy returns, on the back of timely acquisitions.
In light of the above, the Company has decided to declare a special dividend of $0.50 per common share. While rewarding our shareholders as a result of increased cash flows and profitability, the payment of that dividend is not expected in any way to affect our capacity to continue growing opportunistically in a volatile market environment.”
