MONACO, Jan. 23, 2019 (GLOBE NEWSWIRE) — Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the fourth quarter and year ended December 31, 2018.
- Adjusted Net Income available to common stockholders(1) of $ 13.3 million or $ 0.12 per share and $ 46.9 million or $ 0.42 per share for the three-months and the year ended December 31, 2018, respectively.
- During 2018, ordered new buildings and acquired secondhand vessels for a total value of approximately $ 900.0 million. The TEU-weighted average employment period of the vessels involved in these transactions is 8 years.
- Successfully concluded the acquisition of the 60% equity interest of York Capital Management in five 2016–built, 14,000 TEU containerships bringing the Company’s ownership in these five vessels to 100% (included in the above mentioned $ 900.0 million transactions).
- Chartered in total 12 vessels over the quarter.
- Declared dividend of $0.10 per share on its common stock and dividends on all four classes of its preferred stock.
(1) Adjusted Net Income available to common stockholders is a non-GAAP measure and should not be used in isolation or as a substitute for Costamare’s financial results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). For the definition and reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to Exhibit I.
New Business Developments
A. New acquisitions
- In November 2018, we acquired the 60% equity interest of York Capital Management in five 2016–built, 14,000 TEU containerships. The acquisition brought the Company’s ownership in these five vessels, which currently operate under long term charters to Evergreen expiring in 2026, to 100%.
B. New financing transactions
- In October 2018, we entered into a financing agreement with a European financial institution for the two 1996-built, 8,044 TEU containerships, the Maersk Kleven and Maersk Kotka. The loan facility will be repayable over 2.5 years.
- In December 2018, we concluded the refinancing of the outstanding loan amount of $ 44.4 million under two credit facilities with a leading European financial institution. The new facility matures in November 2023 and has a balloon payment at expiry of $ 27.0 million.
C. Vessel disposals
- In November 2018, we sold for demolition the 1994-built, 1,162 TEU container vessel Petalidi.
D. New charter agreements
- The Company has chartered in total 12 vessels over the quarter. More specifically, the Company:
– Agreed to extend the charter of the 2017-built, 11,010 TEU containership Cape Sounio with ZIM for a period of 12 to 14 months at charterers’ option, starting from March 15, 2019, at a daily rate of $33,500.
– Agreed to extend the charter of the 2017-built, 11,010 TEU containership Cape Artemisio with Hapag Lloyd for a period of 10 to 12 months at charterers’ option, starting from May 12, 2019, at a daily rate of $32,500.
– Agreed to extend the charter of the 2000-built, 4,890 TEU containership Oakland Express with Hapag Lloyd for a period starting from February 1, 2019 and expiring at charterers’ option during the period from November 30, 2019 to January 31, 2020, at a daily rate of $10,000.
– Agreed to extend the charter of the 2000-built, 4,890 TEU containership Halifax Express with Hapag Lloyd for a period starting from February 1, 2019 and expiring at charterers’ option during the period from October 30, 2020 to December 30, 2020, at a daily rate of $10,000.
– Agreed to extend the charter of the 2000-built, 4,890 TEU containership Singapore Express with Hapag Lloyd for a period starting from February 1, 2019 and expiring at charterers’ option during the period from July 31, 2020 to September 30, 2020, at a daily rate of $10,000.
– Agreed to charter the 1997-built, 7,403 TEU containership Kokura (ex. Niledutch Panther) with CMA CGM for a period of 42 to 84 days at charterers’ option, starting from November 25, 2018, at a daily rate of $11,000.
– Agreed to extend the charter of the 2003-built, 5,928 TEU containership Venetiko with Hapag Lloyd for a period starting from November 19, 2018 and expiring at charterers’ option during the period from June 1, 2019 to November 1, 2019, at a daily rate of $9,750.
– Agreed to extend the charter of the 2001-built, 5,576 TEU containership Ensenada with ONE for a period of 50 to 70 days at charterers’ option, starting from February 21, 2019, at a daily rate of $9,150.
– Agreed to extend the charter of the 2004-built, 4,992 TEU containership Piraeus for a period of 42 to 168 days at charterers’ option, starting from November 16, 2018. Subsequently agreed to extend the charter for a period of 42 to 126 days at charterers’ option, starting from December 28, 2018.
– Agreed to extend the charter of the 2000-built, 1,645 TEU containership Neapolis with Evergreen for a period of 4 to 7 months at charterers’ option, starting from February 14, 2019, at a daily rate of $7,100.
– Agreed to extend the charter of the 1996-built, 1,504 TEU containership Prosper with Evergreen for a period of 4 to 7 months at charterers’ option, starting from January 28, 2019, at a daily rate of $6,975.
– Agreed to extend the charter of the 2001-built, 1,078 TEU containership Luebeck with MSC for a period of 11 to 13 months at charterers’ option, starting from February 19, 2019, at a daily rate of $6,200.
E. Dividend announcements
- On January 3, 2019, we declared a dividend for the quarter ended December 31, 2018, of $0.10 per share on our common stock, payable on February 7, 2019, to stockholders of record of common stock as of January 22, 2019.
- On January 3, 2019, we declared a dividend of $0.476563 per share on our Series B Preferred Stock, a dividend of $0.531250 per share on our Series C Preferred Stock, a dividend of $0.546875 per share on our Series D Preferred Stock and a dividend of $0.554688 per share on our Series E Preferred Stock which were all paid on January 15, 2019 to holders of record as of January 14, 2019.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
“During the fourth quarter and the year the Company delivered profitable results.
The year 2018 closed on a mixed note; while charter rates rallied in the first half of the year, average rates fell in the second half finishing the year slightly below their starting point, except for the larger ships. During the last weeks however, we have witnessed a tighter market with regards to large modern vessels, where supply has been limited driving up charter rates.
We have been active during the year, entering into new transactions with a total value of close to $ 900 million. These include both new buildings and second hand ships with an average time charter duration of 8 years.
Finally, on the financing side, we financed with a leading financial institution the two recently acquired 1996-built, 8,000 TEU sister containerships, as well as a $ 25 million balloon due in December of last year secured by older vessels. We have no meaningful balloon repayments over the next 12 months.”
Financial Summary
| Year ended December 31, | Three-month period ended December 31, |
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| (Expressed in thousands of U.S. dollars, except share and per share data): | 2017 | 2018 | 2017 | 2018 | ||||||||||||||||||||||||
| Voyage revenue | $ | 412,433 | $ | 380,397 | $ | 100,618 | $ | 106,153 | ||||||||||||||||||||
| Accrued charter revenue (1) | $ | (11,204 | ) | $ | (7,294 | ) | $ | (2,752 | ) | $ | (2,263 | ) | ||||||||||||||||
| Amortization of time-charter assumed | – | $ | 26 | – | $ | 26 | ||||||||||||||||||||||
| Voyage revenue adjusted on a cash basis (2) | $ | 401,229 | $ | 373,129 | $ | 97,866 | $ | 103,916 | ||||||||||||||||||||
| Adjusted Net Income available to common stockholders (3) | $ | 76,933 | $ | 46,857 | $ | 18,408 | $ | 13,259 | ||||||||||||||||||||
| Weighted Average number of shares | 100,527,907 | 110,395,134 | 107,661,705 | 111,951,107 | ||||||||||||||||||||||||
| Adjusted Earnings per share (3) | $ | 0.77 | $ | 0.42 | $ | 0.17 | $ | 0.12 | ||||||||||||||||||||
| Net Income | $ | 72,876 | $ | 67,239 | $ | 2,670 | $ | 19,732 | ||||||||||||||||||||
| Net Income /(Loss) available to common stockholders | $ | 51,813 | $ | 36,736 | $ | (2,596 | ) | $ | 11,915 | |||||||||||||||||||
| Weighted Average number of shares | 100,527,907 | 110,395,134 | 107,661,705 | 111,951,107 | ||||||||||||||||||||||||
| Earnings / (Losses) per share | $ | 0.52 | $ | 0.33 | $ | (0.02 | ) | $ | 0.11 | |||||||||||||||||||
(1) Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period and during the last years of such charter cash received will exceed revenue recognized on a straight-line basis.
(2) Voyage revenue adjusted on a cash basis represents Voyage revenue after adjusting for non-cash “Accrued charter revenue” recorded under charters with escalating charter rates. However, Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). We believe that the presentation of Voyage revenue adjusted on a cash basis is useful to investors because it presents the charter revenue for the relevant period based on the then current daily charter rates. The increases or decreases in daily charter rates under our charter party agreements are described in the notes to the “Fleet List” below.
(3) Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are non-GAAP measures. Refer to the reconciliation of Net Income to Adjusted Net Income.
Non-GAAP Measures
The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three months and the years ended December 31, 2018 and 2017. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, voyage revenue or net income as determined in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income available to common stockholders and (iii) Adjusted Earnings per Share.
Exhibit I
Reconciliation of Net Income to Adjusted Net Income available to common stockholders and Adjusted Earnings per Share
| Year ended December 31, | Three-month period ended December 31, |
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| (Expressed in thousands of U.S. dollars, except share and per share data) | 2017 | 2018 | 2017 | 2018 | ||||||||||||
| Net Income | $ | 72,876 | $ | 67,239 | $ | 2,670 | $ | 19,732 | ||||||||
| Earnings allocated to Preferred Stock | (21,063 | ) | (30,503 | ) | (5,266 | ) | (7,817 | ) | ||||||||
| Net Income / (Loss) available to common stockholders | 51,813 | 36,736 | (2,596 | ) | 11,915 | |||||||||||
| Accrued charter revenue | (11,204 | ) | (7,294 | ) | (2,752 | ) | (2,263 | ) | ||||||||
| General and administrative expenses – non-cash component | 3,866 | 3,755 | 864 | 657 | ||||||||||||
| Amortization of prepaid lease rentals, net | 8,429 | 8,150 | 2,054 | 2,055 | ||||||||||||
| Amortization of Time charter assumed | – | 26 | – | 26 | ||||||||||||
| Realized (Gain) / loss on Euro/USD forward contracts (1) | (765 | ) | 97 | (83 | ) | – | ||||||||||
| Loss on sale / disposals of vessels | 4,856 | 3,071 | – | 291 | ||||||||||||
| Swaps’ breakage costs | – | 1,234 | – | – | ||||||||||||
| Loss on vessel held for sale | 2,379 | 101 | 2,379 | 101 | ||||||||||||
| Vessels’ impairment loss | 17,959 | – | 17,959 | – | ||||||||||||
| Vessel impairment loss by a jointly owned company with York included in equity (gain) / loss on investments | 896 | – | 896 | – | ||||||||||||
| Loss on sale / disposal of vessel by a jointly owned company with York included in equity (gain) / loss on investments | – | 707 | – | 43 | ||||||||||||
| Loss on asset held for sale by a jointly owned company with York included in equity gain on investments | – | 112 | – | 112 | ||||||||||||
| (Gain) / loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1) | (1,296 | ) | 162 | (313 | ) | 322 | ||||||||||
| Adjusted Net Income available to common stockholders | $ | 76,933 | $ | 46,857 | $ | 18,408 | $ | 13,259 | ||||||||
| Adjusted Earnings per Share | $ | 0.77 | $ | 0.42 | $ | 0.17 | $ | 0.12 | ||||||||
| Weighted average number of shares | 100,527,907 | 110,395,134 | 107,661,705 | 111,951,107 | ||||||||||||
Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income after earnings allocated to preferred stock, but before non-cash “Accrued charter revenue” recorded under charters with escalating charter rates, realized (gain) / loss on Euro/USD forward contracts, loss on sale / disposal of vessels, loss on vessel held for sale, loss on sale / disposal of vessel by a jointly owned company with York included in equity gain on investments, loss on asset held for sale by a jointly owned company with York included in equity gain on investments, swaps’ breakage costs, non-cash general and administrative expenses and non-cash other items, amortization of prepaid lease rentals, amortization of time charter assumed, net and non-cash changes in fair value of derivatives. “Accrued charter revenue” is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are not recognized measurements under U.S. GAAP. We believe that the presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted Net Income available to common stockholders and Adjusted Earnings per Share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
(1) Items to consider for comparability include gains and charges. Gains positively impacting Net Income available to common stockholders are reflected as deductions to Adjusted Net Income available to common stockholders. Charges negatively impacting Net Income available to common stockholders are reflected as increases to Adjusted Net Income available to common stockholders.
Results of Operations
Three-month period ended December 31, 2018 compared to the three-month period ended December 31, 2017
During the three-month periods ended December 31, 2018 and 2017, we had an average of 59.8 and 52.6 vessels, respectively, in our fleet. In the three-month period ended December 31, 2018, we acquired the 60% equity interest of York Capital Management in each of the 14,000 TEU container vessels Triton, Titan, Talos, Taurus and Theseus and as a result we obtained 100% of the equity interest in each of these five vessels. In the three-month period ended December 31, 2018, we sold the 3,842 TEU container vessel MSC Koroni. In the three-month period ended December 31, 2017, we took delivery of the 2005-built, 2,556 TEU secondhand containership CMA CGM L’Etoile. In the three-month periods ended December 31, 2018 and 2017, our fleet ownership days totaled 5,505 and 4,843 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.
| (Expressed in millions of U.S. dollars, except percentages) |
Three-month period ended December 31, |
Change | Percentage Change |
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| 2017 | 2018 | |||||||||||
| Voyage revenue | $ | 100.6 | $ | 106.2 | $ | 5.6 | 5.6 | % | ||||
| Voyage expenses | (0.6 | ) | (1.0 | ) | 0.4 | 66.7 | % | |||||
| Voyage expenses – related parties | (0.8 | ) | (0.9 | ) | 0.1 | 12.5 | % | |||||
| Vessels’ operating expenses | (26.9 | ) | (30.3 | ) | 3.4 | 12.6 | % | |||||
| General and administrative expenses | (1.3 | ) | (1.3 | ) | – | – | ||||||
| Management fees – related parties | (4.3 | ) | (5.0 | ) | 0.7 | 16.3 | % | |||||
| General and administrative expenses – non-cash component | (0.9 | ) | (0.7 | ) | (0.2 | ) | (22.2 | %) | ||||
| Amortization of dry-docking and special survey costs | (1.8 | ) | (2.1 | ) | 0.3 | 16.7 | % | |||||
| Depreciation | (23.8 | ) | (26.5 | ) | 2.7 | 11.3 | % | |||||
| Vessels’ impairment loss | (18.0 | ) | – | (18.0 | ) | n.m. | ||||||
| Amortization of prepaid lease rentals, net | (2.1 | ) | (2.1 | ) | – | – | ||||||
| Loss on sale / disposal of vessels | – | (0.3 | ) | 0.3 | n.m. | |||||||
| Loss on vessel held for sale | (2.4 | ) | (0.1 | ) | (2.3 | ) | (95.8 | %) | ||||
| Interest income | 0.8 | 0.8 | – | – | ||||||||
| Interest and finance costs | (16.5 | ) | (19.7 | ) | 3.2 | 19.4 | % | |||||
| Equity gain on investments | 0.9 | 2.9 | 2.0 | 222.2 | % | |||||||
| Other | – | 0.1 | 0.1 | n.m. | ||||||||
| Loss on derivative instruments | (0.2 | ) | (0.3 | ) | 0.1 | 50.0 | % | |||||
| Net Income | $ | 2.7 | $ | 19.7 | ||||||||
| (Expressed in millions of U.S. dollars, except percentages) |
Three-month period ended December 31, |
Change | Percentage Change |
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| 2017 | 2018 | |||||||||||
| Voyage revenue | $ | 100.6 | $ | 106.2 | $ | 5.6 | 5.6 | % | ||||
| Accrued charter revenue | (2.8 | ) | (2.3 | ) | (0.5 | ) | (17.9 | %) | ||||
| Voyage revenue adjusted on a cash basis | $ | 97.8 | $ | 103.9 | $ | 6.1 | 6.2 | % | ||||
| Vessels’ operational data | Three-month period ended December 31, |
Percentage Change |
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| 2017 | 2018 | Change | ||||||||
| Average number of vessels | 52.6 | 59.8 | 7.2 | 13.7 | % | |||||
| Ownership days | 4,843 | 5,505 | 662 | 13.7 | % | |||||
| Number of vessels under dry-docking | 3 | 2 | (1 | ) | ||||||
Voyage Revenue
Voyage revenue increased by 5.6%, or $ 5.6 million, to $106.2 million during the three-month period ended December 31, 2018, from $100.6 million during the three-month period ended December 31, 2017. The increase is mainly attributable to revenue earned by (i) five vessels acquired during the fourth quarter of 2018 and (ii) seven secondhand vessels acquired during the fourth quarter of 2017 and the nine-month period ended September 30, 2018; partly off-set by decreased charter rates and increased off-hire days for certain of our vessels and revenue not earned by two vessels sold for demolition in the second and fourth quarter of 2018.
Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 6.2%, or $6.1 million, to $103.9 million during the three-month period ended December 31, 2018, from $97.8 million during the three-month period ended December 31, 2017. Accrued charter revenue for the three-month periods ended December 31, 2018 and 2017, amounted to $2.3 million and $2.8 million, respectively.
Voyage Expenses
Voyage expenses were $1.0 million and $0.6 million for the three-month periods ended December 31, 2018 and 2017, 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 $0.9 million and $0.8 million for the three-month periods ended December 31, 2018 and 2017, respectively. Voyage expenses – related parties represent (i) fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping Company S.A. (“Costamare Shipping”) and by Costamare Shipping Services Ltd. (“Costamare Services”) pursuant to the Framework Agreement between Costamare Shipping and us dated November 2, 2015 (the “Framework Agreement”), the Services Agreement between Costamare Services and our vessel-owning subsidiaries dated November 2, 2015 (the “Services Agreement”) and the individual ship-management agreements pertaining to each vessel and (ii) charter brokerage fees payable to Blue Net Chartering GmbH & Co. KG (“Blue Net”) pursuant to the Agreement Regarding Charter Brokerage dated January 1, 2018 between Costamare Shipping and Blue Net, as amended from time to time.
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 $ 30.3 million and $26.9 million during the three-month periods ended December 31, 2018 and 2017, respectively.
General and Administrative Expenses
General and administrative expenses were $1.3 million for each of the three-month periods ended December 31, 2018 and 2017 and both include $0.63 million, which is part of the annual fee that Costamare Services receives based on the Services Agreement.
Management Fees – related parties
Management fees paid to our managers pursuant to the Framework Agreement were $ 5.0 million and $4.3 million during the three-month periods ended December 31, 2018 and 2017, respectively.
General and administrative expenses – non-cash component
General and administrative expenses – non-cash component were $0.7 million for the three-month period ended December 31, 2018, representing the value of the shares issued to Costamare Services on December 31, 2018, pursuant to the Services Agreement. For the three-month period ended December 31, 2017, the respective amount was $0.9 million, representing the fair value of the shares issued to Costamare Services on December 29, 2017, pursuant to the Services Agreement.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $2.1 million and $1.8 million during the three-month periods ended December 31, 2018 and 2017, respectively. During the three-month period ended December 31, 2018, two vessels underwent and completed their special survey. During the three-month period ended December 31, 2017, three vessels underwent and completed their special survey.
Depreciation
Depreciation expense increased by 11.3%, or $2.7 million, to $26.5 million during the three-month period ended December 31, 2018, from $23.8 million during the three-month period ended December 31, 2017. The increase was mainly attributable to the increased average number of vessels during the three-month period ended December 31, 2018 compared to the three-month period ended December 31, 2017.
Vessels’ impairment loss
During the three-month period ended December 31, 2018, no impairment loss was recorded. During the three-month period ended December 31, 2017, we recorded an impairment loss in relation to seven of our vessels in the amount of $18.0 million, in the aggregate.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net was $2.1 million for each of the three-month periods ended December 31, 2018 and 2017.
Loss on sale / disposal of vessels
During the three-month period ended December 31, 2018, we sold the 3,842 TEU container vessel MSC Koroni and we recorded a loss of $0.3 million. During the three-month period ended December 31, 2017, no vessel was sold.
Loss on vessel held for sale
During the three-month period ended December 31, 2018, we recorded a loss on vessel held for sale of $0.1 million, representing the expected loss from the sale of one of our vessels during the next twelve-month period. During the three-month period ended December 31, 2017, we recorded a loss on vessel held for sale of $2.4 million, representing the expected loss from the sale of one of our vessels, which we sold in June 2018.
Interest Income
Interest income was $0.8 million for each of the three-month periods ended December 31, 2018 and 2017.
Interest and Finance Costs
Interest and finance costs were $19.7 million and $16.5 million during the three-month periods ended December 31, 2018 and 2017, respectively. The increase is mainly attributable to the increased average loan balance during the three-month period ended December 31, 2018 compared to the three-month period ended December 31, 2017.
Equity Gain on Investments
During the three-month period ended December 31, 2018, we recorded an equity gain on investments of $2.9 million representing our share of the net gain in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated on May 18, 2015 and as further amended on June 12, 2018 (the “Framework Deed”), between the Company and a wholly-owned subsidiary on the one hand, and York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, “York”) on the other hand. Since November 12, 2018, we have held the 100% of the equity interest in five previously jointly owned companies with York, and as of that date these five companies are consolidated in our consolidated financial statements. As of December 31, 2018, 13 companies are jointly -owned with York. During the three-month period ended December 31, 2017, we recorded an equity gain on investments of $0.9 million also relating to investments under the Framework Deed.
Loss on Derivative Instruments
The fair value of our 13 interest rate derivative instruments which were outstanding as of December 31, 2018 equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2018, the fair value of these 13 interest rate derivative instruments in aggregate amounted to a net asset of $7.2 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the three-month period ended December 31, 2018, a net loss of $2.7 million has been included in OCI and a net loss of $0.3 million has been included in Loss on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended December 31, 2018.
Cash Flows
Three-month periods ended December 31, 2018 and 2017
| Condensed cash flows | Three-month period ended December 31, |
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| (Expressed in millions of U.S. dollars) | 2017 | 2018 | ||||||
| Net Cash Provided by Operating Activities | $ | 46.5 | $ | 35.0 | ||||
| Net Cash Provided by / (Used in) Investing Activities | $ | (9.9 | ) | $ | 0.9 | |||
| Net Cash Used in Financing Activities | $ | (51.4 | ) | $ | (24.2 | ) | ||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended December 31, 2018, decreased by $11.5 million to $35.0 million, from $46.5 million for the three-month period ended December 31, 2017. The decrease is mainly attributable to 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 $6.6 million, the increased special survey costs of $1.1 million and increased payments for interest (including swap net receipts) during the period of $2.6 million during the three-month period ended December 31, 2018 compared to the three-month period ended December 31, 2017; partly off-set by the increased cash from operations of $6.0 million.
Net Cash Provided by / (Used in) Investing Activities
Net cash provided by investing activities was $0.9 million in the three-month period ended December 31, 2018, which mainly consisted of proceeds we received from the sale of one vessel, net payments for the acquisition of the 60% equity interest in five companies previously jointly owned with York pursuant to the Framework Deed and payments for capitalized expenses for certain of our vessels.
Net cash used in investing activities was $9.9 million in the three-month period ended December 31, 2017, which consisted of payment for the acquisition of one secondhand vessel and payments for working capital injected into certain entities pursuant to the Framework Deed (net of dividend distributions we received).
Net Cash Used in Financing Activities
Net cash used in financing activities was $24.2 million in the three-month period ended December 31, 2018, which mainly consisted of (a) $9.0 million net payments relating to our debt financing agreements, (b) $6.6 million we paid for dividends to holders of our common stock for the third quarter of 2018 and (c) $1.0 million we paid for dividends to holders of our Series B Preferred Stock, $2.1 million we paid for dividends to holders of our Series C Preferred Stock, $2.2 million we paid for dividends to holders of our Series D Preferred Stock and $2.6 million we paid for dividends to holders of our Series E Preferred Stock for the period from July 15, 2018 to October 14, 2018.
Net cash used in financing activities was $51.4 million in the three-month period ended December 31, 2017, which mainly consisted of (a) $41.4 million net payments relating to our debt financing agreements, (b) $4.6 million we paid for dividends to holders of our common stock for the third quarter of 2017 and (c) $1.0 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), $2.1 million we paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”) and $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (“Series D Preferred Stock”), for the period from July 15, 2017 to October 14, 2017.
Year ended December 31, 2018 compared to the year ended December 31, 2017
During the years ended December 31, 2018 and 2017, we had an average of 55.8 and 52.7 vessels, respectively, in our fleet. In the year ended December 31, 2018, (i) we acquired the 60% equity interest of York Capital Management in each of the 14,000 TEU container vessels Triton, Titan, Talos, Taurus and Theseus and, as a result, we obtained 100% of the equity interest in each of these five vessels, (ii) we accepted delivery of the secondhand containerships Michigan, Trader, Megalopolis, Marathopolis, Maersk Kleven and Maersk Kotka with an aggregate capacity of 28,602 TEU and (iii) we sold the container vessels Itea and MSC Koroni with an aggregate capacity of 7,684 TEU. In the year ended December 31, 2017, we accepted delivery of the secondhand containerships Leonidio, Kyparissia, Maersk Kowloon and CMA CGM L’Etoile with an aggregate capacity of 19,941 TEU and we sold the container vessels Romanos, Marina, Mandraki and Mykonos with an aggregate capacity of 18,057 TEU. In the years ended December 31, 2018 and 2017, our fleet ownership days totaled 20,359 and 19,221 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.
| (Expressed in millions of U.S. dollars, except percentages) |
Year ended December 31, | Change | Percentage Change |
|||||||||
| 2017 | 2018 | |||||||||||
| Voyage revenue | $ | 412.4 | $ | 380.4 | $ | (32.0 | ) | (7.8 | %) | |||
| Voyage expenses | (2.6 | ) | (5.8 | ) | 3.2 | 123.1 | % | |||||
| Voyage expenses – related parties | (3.1 | ) | (3.2 | ) | 0.1 | 3.2 | % | |||||
| Vessels’ operating expenses | (103.8 | ) | (110.6 | ) | 6.8 | 6.6 | % | |||||
| General and administrative expenses | (5.7 | ) | (5.4 | ) | (0.3 | ) | (5.3 | %) | ||||
| Management fees – related parties | (18.7 | ) | (19.5 | ) | 0.8 | 4.3 | % | |||||
| General and administrative expenses – non-cash component | (3.9 | ) | (3.8 | ) | (0.1 | ) | (2.6 | %) | ||||
| Amortization of dry-docking and special survey costs | (7.6 | ) | (7.3 | ) | (0.3 | ) | (3.9 | %) | ||||
| Depreciation | (96.4 | ) | (96.3 | ) | (0.1 | ) | (0.1 | %) | ||||
| Amortization of prepaid lease rentals, net | (8.4 | ) | (8.2 | ) | (0.2 | ) | (2.4 | %) | ||||
| Loss on sale / disposal of vessels | (4.9 | ) | (3.1 | ) | (1.8 | ) | (36.7 | %) | ||||
| Vessels’ impairment loss | (18.0 | ) | – | (18.0 | ) | n.m. | ||||||
| Loss on vessel held for sale | (2.4 | ) | (0.1 | ) | (2.3 | ) | (95.8 | %) | ||||
| Foreign exchange losses | – | (0.1 | ) | 0.1 | n.m. | |||||||
| Interest income | 2.7 | 3.5 | 0.8 | 29.6 | % | |||||||
| Interest and finance costs | (69.8 | ) | (64.0 | ) | (5.8 | ) | (8.3 | %) | ||||
| Swaps’ breakage costs | – | (1.2 | ) | 1.2 | n.m. | |||||||
| Equity gain on investments | 3.4 | 12.1 | 8.7 | 255.9 | % | |||||||
| Other | 0.6 | 0.4 | (0.2 | ) | (33.3 | %) | ||||||
| Loss on derivative instruments | (0.9 | ) | (0.6 | ) | (0.3 | ) | (33.3 | %) | ||||
| Net Income | $ | 72.9 | $ | 67.2 | ||||||||
| (Expressed in millions of U.S. dollars, except percentages) |
Year ended December 31, | Change | Percentage Change |
|||||||||||||||||
| 2017 | 2018 | |||||||||||||||||||
| Voyage revenue | $ | 412.4 | $ | 380.4 | $ | (32.0 | ) | (7.8 | %) | |||||||||||
| Accrued charter revenue | (11.2 | ) | (7.3 | ) | (3.9 | ) | (34.8 | %) | ||||||||||||
| Voyage revenue adjusted on a cash basis | $ | 401.2 | $ | 373.1 | $ | (28.1 | ) | (7.0 | %) | |||||||||||
| Vessels’ operational data | Year ended December 31, |
Change | Percentage Change |
||||||||||||||||||
| 2017 | 2018 | ||||||||||||||||||||
| Average number of vessels | 52.7 | 55.8 | 3.1 | 5.9 | % | ||||||||||||||||
| Ownership days | 19,221 | 20,359 | 1,138 | 5.9 | % | ||||||||||||||||
| Number of vessels under dry-docking | 7 | 17 | 10 | ||||||||||||||||||
Voyage Revenue
Voyage revenue decreased by 7.8%, or $32.0 million, to $380.4 million during the year ended December 31, 2018, from $412.4 million during the year ended December 31, 2017. The decrease is mainly attributable to (i) decreased charter rates and increased off-hire days for certain of our vessels, (ii) revenue not earned by six vessels sold for demolition in the first and third quarter of 2017 and the second and fourth quarter of 2018; partly off-set by revenue earned by four secondhand vessels acquired during the second and fourth quarter of 2017 and eleven vessels acquired during the year ended December 31, 2018.
Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), decreased by 7.0%, or $28.1 million, to $373.1 million during the year ended December 31, 2018, from $401.2 million during the year ended December 31, 2017. Accrued charter revenue for the year ended December 31, 2018 and 2017, amounted to $7.3 million and $11.2 million, respectively.
Voyage Expenses
Voyage expenses were $5.8 million and $2.6 million for the years ended December 31, 2018 and 2017, 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 $3.2 million and $3.1 million for the years ended December 31, 2018 and 2017, respectively. Voyage expenses – related parties represent (i) fees of 0.75% in the aggregate on voyage revenues charged by Costamare Shipping and by Costamare Services pursuant to the Framework Agreement, the Services Agreement and the individual ship-management agreements pertaining to each vessel and (ii) charter brokerage fees payable to Blue Net pursuant to the Agreement Regarding Charter Brokerage dated January 1, 2018 between Costamare Shipping and Blue Net, as amended from time to time.
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 $110.6 million and $103.8 million during the years ended December 31, 2018 and 2017, respectively.
General and Administrative Expenses
General and administrative expenses were $5.4 million and $5.7 million during the years ended December 31, 2018 and 2017, respectively, and both include $2.5 million, which is part of the annual fee that Costamare Services receives based on the Services Agreement.
Management Fees – related parties
Management fees paid to our managers pursuant to the Framework Agreement were $19.5 million and $18.7 million for the years ended December 31, 2018 and 2017, respectively.
General and administrative expenses – non-cash component
General and administrative expenses – non-cash component for the year ended December 31, 2018 amounted to $3.8 million representing the value of the shares issued to Costamare Services on March 30, June 29, September 28 and December 31, 2018, pursuant to the Services Agreement. For the year ended December 31, 2017, the respective amount was $3.9 million, representing the fair value of the shares issued to Costamare Services on March 30, June 30, September 29 and December 29, 2017, pursuant to the Services Agreement.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $7.3 million and $7.6 million during the years ended December 31, 2018 and 2017, respectively. During the year ended December 31, 2018, 17 vessels underwent and completed their special survey. During the year ended December 31, 2017, seven vessels underwent and completed their special survey.
Depreciation
Depreciation expense decreased by 0.1%, or $0.1 million, to $96.3 million during the year ended December 31, 2018, from $96.4 million during the year ended December 31, 2017.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net was $8.2 million during the year ended December 31, 2018. Amortization of prepaid lease rentals, net was $8.4 million during the year ended December 31, 2017.
Loss on sale / disposal of vessels
During the year ended December 31, 2018, we recorded a loss of $2.2 million from the sale of the vessel MSC Koroni and $0.9 million from the sale of the vessel Itea which was classified as Asset held for sale as at December 31, 2017. During the year ended December 31, 2017, we recorded an aggregate net loss of $4.3 million from the sale of the vessels Marina, Mandraki and the Mykonos and a loss of $0.6 million from the sale of the vessel Romanos, which was classified as Asset held for sale as at December 31, 2016.
Vessels’ impairment loss
During the year ended December 31, 2018, no impairment loss was recorded. During the year ended December 31, 2017, we recorded an impairment loss in relation to seven of our vessels in the amount of $18.0 million, in the aggregate.
Loss on vessel held for sale
During the year ended December 31, 2018, we recorded a loss on vessel held for sale of $0.1 million, representing the expected loss from the sale of one of our vessels during the next twelve-month period. During the year ended December 31, 2017, we recorded a loss on vessel held for sale of $2.4 million, representing the expected loss from the sale of one of our vessels, which we sold in June 2018.
Interest Income
Interest income amounted to $3.5 million and $2.7 million for the years ended December 31, 2018 and 2017, respectively.
Interest and Finance Costs
Interest and finance costs were $64.0 million and $69.8 million during the years ended December 31, 2018 and 2017, respectively. The decrease is mainly attributable to the net interest charged on our interest rate swap agreements that qualify for hedge accounting; partly offset by increased interest expense charged due to the increased loan balance during the year ended December 31, 2018 compared to the year ended December 31, 2017.
Swaps Breakage Costs
During the year ended December 31, 2018, we terminated three interest rate derivative instruments that qualify for hedge accounting and we paid the counterparties breakage costs of $1.2 million.
Equity Gain on Investments
During the year ended December 31, 2018, we recorded an equity gain on investments of $12.1 million representing our share of the net gain in jointly owned companies pursuant to the Framework Deed. Since November 12, 2018, we hold the 100% equity interest in five previously jointly owned companies with York and as of that date, these five companies are consolidated in our consolidated financial statements. As of December 31, 2018, 13 companies are jointly -owned with York.
During the year ended December 31, 2017, we recorded an equity gain on investments of $3.4 million also relating to investments under the Framework Deed.
Loss on Derivative Instruments
The fair value of our 13 interest rate derivative instruments which were outstanding as of December 31, 2018 equates to the amount that would be paid by us or to us should those instruments be terminated. As of December 31, 2018, the fair value of these 13 interest rate derivative instruments in aggregate amounted to a net asset of $7.2 million. The effective portion of the change in the fair value of the interest rate derivative instruments that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) while the ineffective portion is recorded in the consolidated statements of income. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in the consolidated statement of income. For the year ended December 31, 2018, a net gain of $5.5 million has been included in OCI and a net loss of $0.4 million has been included in Loss on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the year ended December 31, 2018.
Cash Flows
Years ended December 31, 2018 and 2017
| Condensed cash flows | Years ended December 31, | |||||||
| (Expressed in millions of U.S. dollars) | 2017 | 2018 | ||||||
| Net Cash Provided by Operating Activities | $ | 191.8 | $ | 140.8 | ||||
| Net Cash Used in Investing Activities | $ | (43.4 | ) | $ | (112.6 | ) | ||
| Net Cash Used in Financing Activities | $ | (140.0 | ) | $ | (80.5 | ) | ||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the year ended December 31, 2018, decreased by $51.0 million to $140.8 million, from $191.8 million for the year ended December 31, 2017. The decrease is mainly attributable to the decreased cash from operations of $28.1 million, the increased special survey costs of $13.0 million and 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 $11.7 million during the year ended December 31, 2018 compared to the year ended December 31, 2017; partly off-set by decreased payments for interest (including swap net payments) during the year of $9.9 million.
Net Cash Used in Investing Activities
Net cash used in investing activities was $112.6 million in the year ended December 31, 2018, which mainly consisted of net payments relating to the acquisition of six secondhand vessels and five newbuild vessels, net payments for the acquisition of the 60% equity interest in five companies previously jointly owned with York pursuant to the Framework Deed, payments for capital injection into certain entities pursuant to the Framework Deed (net of dividend distributions we received) and proceeds we received from the sale of two vessels.
Net cash used in investing activities was $43.4 million in the year ended December 31, 2017, which consisted of payments for the acquisition of four secondhand vessels and payments for working capital injected into certain entities pursuant to the Framework Deed (net of dividend distributions we received); partly off-set by proceeds we received from the sale of four vessels.
Net Cash Used in Financing Activities
Net cash used in financing activities was $80.5 million in the year ended December 31, 2018, which mainly consisted of (a) $139.2 million net payments relating to our debt financing agreements, (b) $111.2 million net proceeds we received from our January 2018 public offering, of 4.6 million shares of our Series E Preferred Stock, net of underwriting discounts and expenses incurred in the offering, (c) $20.9 million we paid for dividends to holders of our common stock for the fourth quarter of 2017, the first quarter of 2018, the second quarter of 2018 and the third quarter of 2018 and (d) $3.8 million we paid for dividends to holders of our Series B Preferred Stock, $8.5 million we paid for dividends to holders of our Series C Preferred Stock, $8.8 million we paid for dividends to holders of our Series D Preferred Stock, for the periods from October 15, 2017 to January 14, 2018, January 15, 2018 to April 14, 2018, April 15, 2018 to July 14, 2018 and July 15, 2018 to October 14, 2018 and $7.2 million we paid for dividends to holders of our Series E Preferred Stock, for the period from January 30, 2018 to April 14, 2018, April 15, 2018 to July 14, 2018 and July 15, 2018 to October 14, 2018.
Net cash used in financing activities was $140.0 million in the year ended December 31, 2017, which mainly consisted of (a) $91.7 million we received from our follow-on offering in May 2017, net of underwriting discounts and expenses incurred in the offering, (b) $192.2 million net payments relating to our debt financing agreements, (c) $16.5 million we paid for dividends to holders of our common stock for the fourth quarter of 2016, the first quarter, the second quarter and the third quarter of 2017 and (d) $3.8 million we paid for dividends to holders of our Series B Preferred Stock, $8.5 million we paid for dividends to holders of our Series C Preferred Stock and $8.8 million we paid for dividends to holders of our Series D Preferred Stock, in each case for each of the periods from October 15, 2016 to January 14, 2017, January 15, 2017 to April 14, 2017, April 15, 2017 to July 14, 2017 and July 15, 2017 to October 14, 2017.
Change in the manner of presentation of certain items
Effective January 1, 2018, we adopted ASU No. 2016-15—Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments and ASU No. 2016-18—Statement of Cash Flows (Topic 230)—Restricted Cash. In order to conform to the current period presentation, we present comparatives in the condensed statement of cash flows as the new ASUs require.
Liquidity and Unencumbered Vessels
Cash and cash equivalents
As of December 31, 2018, we had a total cash liquidity of $166.5 million, consisting of cash, cash equivalents and restricted cash.
Debt-free vessels
As of January 23, 2019, the following vessels were free of debt.
Unencumbered Vessels
(Refer to fleet list for full details)
| Vessel Name | Year Built |
TEU Capacity |
||||
| CMA CGM L’ETOILE | 2005 | 2,556 | ||||
| MICHIGAN | 2008 | 1,300 | ||||
| ENSENADA (*) | 2001 | 5,576 | ||||
| ELAFONISOS (*) | 1999 | 2,526 | ||||
| MONEMVASIA (*) | 1998 | 2,472 | ||||
| ARKADIA (*) | 2001 | 1,550 | ||||
(*) Vessels acquired pursuant to the Framework Deed with York.
Capital commitments
As of January 23, 2019, we had outstanding equity commitments relating to five contracted newbuilds aggregating approximately $31.4 million payable until the vessels are delivered in 2021.
Conference Call details:
On Thursday, January 24, 2019 at 8:30 a.m. EST, Costamare’s management team will hold a conference call to discuss the financial results. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-844-887-9405 (from the US), 0808-238-9064 (from the UK) or +1-412-317-9258 (from outside the US and the UK). Please quote “Costamare”. A replay of the conference call will be available until January 31, 2019. The United States replay number is +1-877-344-7529; the standard international replay number is +1-412-317-0088; and the access code required for the replay is: 10128176.
Live webcast:
There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com) under the “Investors” section. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
About Costamare Inc.
Costamare Inc. is one of the world’s leading owners and providers of containerships for charter. The Company has 45 years of history in the international shipping industry and a fleet of 78 containerships, with a total capacity of approximately 548,000 TEU, including five newbuild containerships currently under construction. Eleven of our containerships have been acquired pursuant to the Framework Deed with York Capital Management by vessel-owning joint venture entities in which we hold a minority equity interest. The Company’s common stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock trade on the New York Stock Exchange under the symbols “CMRE”, “CMRE PR B”, “CMRE PR C”, “CMRE PR D” and “CMRE PR E”, respectively.
Forward-Looking Statements
This earnings release contains “forward-looking statements”. In some cases, you can identify these statements by forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could” and “expect” and similar expressions. These statements are not historical facts but instead represent only Costamare’s belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare’s control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in Costamare Inc.’s most recent Annual Report on Form 20-F (File No. 001-34934) under the caption “Risk Factors”.
Company Contacts:
Gregory Zikos – Chief Financial Officer
Konstantinos Tsakalidis – Business Development
Costamare Inc., Monaco
Tel: (+377) 93 25 09 40
Email: [email protected]
Fleet List
The table below provides additional information, as of January 23, 2019, about our fleet of containerships, including our newbuilds on order, the vessels acquired pursuant to the Framework Deed and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.
|
|
Vessel Name | Charterer | Year Built |
Capacity (TEU) |
Current Daily Charter Rate(1) (U.S. dollars) |
Expiration of Charter(2) |
| 1 | TRITON(ii) | Evergreen | 2016 | 14,424 | (*) | March 2026 |
| 2 | TITAN(ii) | Evergreen | 2016 | 14,424 | (*) | April 2026 |
| 3 | TALOS(ii) | Evergreen | 2016 | 14,424 | (*) | July 2026 |
| 4 | TAURUS(ii) | Evergreen | 2016 | 14,424 | (*) | August 2026 |
| 5 | THESEUS(ii) | Evergreen | 2016 | 14,424 | (*) | August 2026 |
| 6 | CAPE AKRITAS(i) | Evergreen | 2016 | 11,010 | 28,000 | June 2019 |
| 7 | CAPE TAINARO(i) | OOCL | 2017 | 11,010 | 28,250 | March 2019 |
| 8 | CAPE KORTIA(i) | Evergreen | 2017 | 11,010 | 28,000 | July 2019 |
| 9 | CAPE SOUNIO(i) | ZIM | 2017 | 11,010 | 33,500 | March 2020(3) |
| 10 | CAPE ARTEMISIO(i) | Hapag Lloyd | 2017 | 11,010 | 32,500 (net) | March 2020(4) |
| 11 | COSCO GUANGZHOU | COSCO | 2006 | 9,469 | 17,900 | March 2019 |
| 12 | COSCO NINGBO | COSCO | 2006 | 9,469 | 17,900 | March 2019 |
| 13 | COSCO YANTIAN | COSCO | 2006 | 9,469 | 17,900 | April 2019 |
| 14 | COSCO BEIJING | COSCO | 2006 | 9,469 | 17,900 | April 2019 |
| 15 | COSCO HELLAS | COSCO | 2006 | 9,469 | 17,900 | May 2019 |
| 16 | MSC AZOV(ii) | MSC | 2014 | 9,403 | 43,000 | December 2026(5) |
| 17 | MSC AJACCIO(ii) | MSC | 2014 | 9,403 | 43,000 | February 2027(5) |
| 18 | MSC AMALFI(ii) | MSC | 2014 | 9,403 | 43,000 | March 2027(5) |
| 19 | MSC ATHENS(ii) | MSC | 2013 | 8,827 | 42,000 | January 2026(6) |
| 20 | MSC ATHOS(ii) | MSC | 2013 | 8,827 | 42,000 | February 2026(6) |
| 21 | VALOR | Evergreen | 2013 | 8,827 | 41,700 | April 2020 |
| 22 | VALUE | Evergreen | 2013 | 8,827 | 41,700 | April 2020 |
| 23 | VALIANT | Evergreen | 2013 | 8,827 | 41,700 | June 2020 |
| 24 | VALENCE | Evergreen | 2013 | 8,827 | 41,700 | July 2020 |
| 25 | VANTAGE | Evergreen | 2013 | 8,827 | 41,700 | September 2020 |
| 26 | NAVARINO | PIL | 2010 | 8,531 | (*) | February 2019 |
| 27 | MAERSK KLEVEN | Maersk | 1996 | 8,044 | 17,500 | April 2021 |
| 28 | MAERSK KOTKA | Maersk | 1996 | 8,044 | 17,500 | April 2021 |
| 29 | MAERSK KOWLOON | Maersk | 2005 | 7,471 | 16,000 | June 2022 |
| 30 | MAERSK KAWASAKI | Maersk | 1997 | 7,403 | 12,100 | March 2019 |
| 31 | KURE | COSCO | 1996 | 7,403 | 16,350 | April 2019 |
| 32 | KOKURA (ex. NILEDUTCH PANTHER) | CMA CGM | 1997 | 7,403 | 11,000 | January 2019 |
| 33 | MSC METHONI | MSC | 2003 | 6,724 | 29,000 | September 2021 |
| 34 | YORK (ex. SEALAND NEW YORK) | MSC | 2000 | 6,648 | 11,450 | October 2019 |
| 35 | MAERSK KOBE | Maersk | 2000 | 6,648 | 16,000 | February 2019 |
| 36 | SEALAND WASHINGTON | Maersk | 2000 | 6,648 | (*) | March 2022(7) |
| 37 | SEALAND MICHIGAN | Maersk | 2000 | 6,648 | (*) | March 2022(7) |
| 38 | SEALAND ILLINOIS | Maersk | 2000 | 6,648 | (*) | March 2022(7) |
| 39 | MAERSK KOLKATA | Maersk | 2003 | 6,644 | 26,100 | March 2022(8) |
| 40 | MAERSK KINGSTON | Maersk | 2003 | 6,644 | 26,100 | March 2022(8) |
| 41 | MAERSK KALAMATA | Maersk | 2003 | 6,644 | 26,100 | March 2022(8) |
| 42 | VENETIKO | Hapag Lloyd | 2003 | 5,928 | 9,750 | June 2019 |
| 43 | ENSENADA (i) | ONE | 2001 | 5,576 | 9,150 | April 2019(9) |
| 44 | ZIM NEW YORK | ZIM | 2002 | 4,992 | 12,650 | September 2019(10) |
| 45 | ZIM SHANGHAI | ZIM | 2002 | 4,992 | 12,650 | September 2019(10) |
| 46 | PIRAEUS | (*) | 2004 | 4,992 | (*) | February 2019 |
| 47 | LEONIDIO(ii) | Maersk | 2014 | 4,957 | 14,200 | December 2024 |
| 48 | KYPARISSIA(ii) | Maersk | 2014 | 4,957 | 14,200 | November 2024 |
| 49 | MEGALOPOLIS | Maersk | 2013 | 4,957 | (*) | July 2025 |
| 50 | MARATHOPOLIS | Maersk | 2013 | 4.957 | (*) | July 2025 |
| 51 | OAKLAND EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | November 2019(11) |
| 52 | HALIFAX EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | October 2020(12) |
| 53 | SINGAPORE EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | July 2020(13) |
| 54 | ULSAN | Maersk | 2002 | 4,132 | 10,900 | February 2019 |
| 55 | POLAR ARGENTINA(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | October 2024 |
| 56 | POLAR BRASIL(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | January 2025 |
| 57 | LAKONIA | – | 2004 | 2,586 | – | Preparations for Drydock |
| 58 | CMA CGM L’ETOILE | CMA CGM | 2005 | 2,556 | 12,250 | March 2019 |
| 59 | ELAFONISOS(i) | MSC | 1999 | 2,526 | (*) | February 2019 |
| 60 | AREOPOLIS | Evergreen | 2000 | 2,474 | 9,850 | February 2019 |
| 61 | MONEMVASIA(i) | Maersk | 1998 | 2,472 | 9,250 | November 2021 |
| 62 | MESSINI | Evergreen | 1997 | 2,458 | 10,600 | February 2019 |
| 63 | MSC REUNION | MSC | 1992 | 2,024 | 8,550 | August 2019 |
| 64 | MSC NAMIBIA II | MSC | 1991 | 2,023 | 9,170 | July 2019 |
| 65 | MSC SIERRA II | MSC | 1991 | 2,023 | 9,170 | June 2019 |
| 66 | MSC PYLOS | MSC | 1991 | 2,020 | 6,800 | February 2019 |
| 67 | NEAPOLIS | Evergreen | 2000 | 1,645 | 7,100 | June 2019(14) |
| 68 | ARKADIA(i) | Evergreen | 2001 | 1,550 | 9,800 | April 2019 |
| 69 | PROSPER | Evergreen | 1996 | 1,504 | 6,975 | May 2019 (15) |
| 70 | MICHIGAN | MSC | 2008 | 1,300 | 7,200 | September 2019 |
| 71 | TRADER | – | 2008 | 1,300 | – | – |
| 72 | ZAGORA | MSC | 1995 | 1,162 | 7,800 | May 2019 |
| 73 | LUEBECK | MSC | 2001 | 1,078 | 6,200 | January 2020 (16) |
Newbuilds
|
Vessel Name |
Shipyard |
Capacity |
Charterer |
Expected Delivery(17) | |
| 1 | YZJ2015-2057 | Jiangsu Yangzijiang Shipbuilding Group |
12,690 | Yang Ming | Q2 2020 |
| 2 | YZJ2015-2058 | Jiangsu Yangzijiang Shipbuilding Group |
12,690 | Yang Ming | Q3 2020 |
| 3 | YZJ2015-2059 | Jiangsu Yangzijiang Shipbuilding Group |
12,690 | Yang Ming | Q3 2020 |
| 4 | YZJ2015-2060 | Jiangsu Yangzijiang Shipbuilding Group |
12,690 | Yang Ming | Q2 2021 |
| 5 | YZJ2015-2061 | Jiangsu Yangzijiang Shipbuilding Group |
12,690 | Yang Ming | Q2 2021 |
(1) Daily charter rates are gross, unless stated otherwise.
(2) Charter terms and expiration dates are based on the earliest date charters could expire. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.
(3) This charter rate will be earned by Cape Sounio from March 15, 2019. Until then the daily charter rate will be $30,700.
(4) This charter rate will be earned by Cape Artemisio from May 12, 2019. Until then the daily charter rate will be $27,000.
(5) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $43,000 until the original earliest redelivery dates of the vessels (December 2, 2023-MSC Azov, February 1, 2024-MSC Ajaccio and March 16, 2024-MSC Amalfi). The charters will also be extended for 3 years.
(6) Following scrubbers’ installation, the daily rate will be increased from the current daily rate of $42,000 until the original earliest redelivery dates of the vessels (January 29, 2023-MSC Athens and February 24, 2023-MSC Athos). The charters will also be extended for 3 years.
(7) The daily rate for Sealand Washington, Sealand Michigan and Sealand Illinois will be a fixed rate until March 1, 2019. From March 1, 2019, the daily rate will be a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions until expiry of the charter.
(8) This charter rate will be earned by Maersk Kolkata, Maersk Kingston and Maersk Kalamata until November 14, 2019, February 28, 2020 and April 12, 2020, respectively. From the aforementioned dates, the daily rate for each of the three vessels, will be a base rate, adjusted pursuant to the terms of a profit/loss sharing mechanism based on market conditions until expiry of the charter.
(9) This charter rate will be earned by Ensenada from February 21, 2019. Until then the daily charter rate will be $16,000.
(10) The amounts in the table reflect the current charter terms, giving effect to our agreement with Zim under its 2014 restructuring plan. Based on this agreement, we have been granted charter extensions and have been issued equity securities representing 1.2% of Zim’s equity and approximately $8.2 million in interest bearing notes maturing in 2023. In May 2018, the Company exercised its option to extend the charters of Zim New York and Zim Shanghai for a one year period at market rate plus $1,100 per day per vessel while the notes remain outstanding. The rate for this fourth optional year has been determined at $12,650 per day.
(11) This charter rate will be earned by Oakland Express from February 1, 2019. Until then the daily charter rate will be $8,800.
(12) This charter rate will be earned by Halifax Express from February 1, 2019. Until then the daily charter rate will be $8,800.
(13) This charter rate will be earned by Singapore Express from February 1, 2019. Until then the daily charter rate will be $8,800.
(14) This charter rate will be earned by Neapolis from February 14, 2019. Until then the daily charter rate will be $10,700.
(15) This charter rate will be earned by Prosper from January 28, 2019. Until then the daily charter rate will be $10,100.
(16) This charter rate will be earned by Luebeck from February 19, 2019. Until then the daily charter rate will be $6,500.
(17) Based on latest shipyard construction schedule, subject to change.
(i) Denotes vessels acquired pursuant to the Framework Deed. The Company holds an equity interest ranging between 25% and 49% in each of the vessel-owning entities.
(ii) Denotes vessels subject to a sale and leaseback transaction.
(*) Denotes charterer’s identity and/or current daily charter rates and/or charter expiration dates, which are treated as confidential.
COSTAMARE INC.
Consolidated Statements of Income
| Year ended December 31, | Three-month period ended December 31, |
|||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share amounts) | 2017 | 2018 | 2017 | 2018 | ||||||||
| REVENUES: | ||||||||||||
| Voyage revenue | $ | 412,433 | $ | 380,397 | $ | 100,618 | $ | 106,153 | ||||
| EXPENSES: | ||||||||||||
| Voyage expenses | (2,649 | ) | (5,847 | ) | (624 | ) | (953 | ) | ||||
| Voyage expenses – related parties | (3,093 | ) | (3,201 | ) | (754 | ) | (861 | ) | ||||
| Vessels’ operating expenses | (103,799 | ) | (110,571 | ) | (26,924 | ) | (30,345 | ) | ||||
| General and administrative expenses | (5,651 | ) | (5,408 | ) | (1,330 | ) | (1,328 | ) | ||||
| Management fees – related parties | (18,693 | ) | (19,533 | ) | (4,338 | ) | (4,984 | ) | ||||
| Non-cash general and administrative expenses and non-cash other items | (3,866 | ) | (3,755 | ) | (864 | ) | (657 | ) | ||||
| Amortization of dry-docking and special survey costs | (7,627 | ) | (7,290 | ) | (1,847 | ) | (2,107 | ) | ||||
| Depreciation | (96,448 | ) | (96,261 | ) | (23,771 | ) | (26,495 | ) | ||||
| Amortization of prepaid lease rentals, net | (8,429 | ) | (8,150 | ) | (2,054 | ) | (2,055 | ) | ||||
| Loss on sale / disposal of vessels | (4,856 | ) | (3,071 | ) | – | (291 | ) | |||||
| Loss on asset held for sale | (2,379 | ) | (101 | ) | (2,379 | ) | (101 | ) | ||||
| Vessels’ impairment loss | (17,959 | ) | – | (17,959 | ) | – | ||||||
| Foreign exchange gains / (losses) | 31 | (51 | ) | (1 | ) | (35 | ) | |||||
| Operating income | $ | 137,015 | $ | 117,158 | $ | 17,773 | $ | 35,941 | ||||
| OTHER INCOME / (EXPENSES): | ||||||||||||
| Interest income | $ | 2,643 | $ | 3,454 | $ | 774 | $ | 820 | ||||
| Interest and finance costs | (69,840 | ) | (63,992 | ) | (16,540 | ) | (19,744 | ) | ||||
| Swap breakage cost | – | (1,234 | ) | – | – | |||||||
| Equity gain on investments | 3,381 | 12,051 | 849 | 2,937 | ||||||||
| Other | 593 | 350 | 48 | 119 | ||||||||
| Loss on derivative instruments | (916 | ) | (548 | ) | (234 | ) | (341 | ) | ||||
| Total other income / (expenses) | $ | (64,139 | ) | $ | (49,919 | ) | $ | (15,103 | ) | $ | (16,209 | ) |
| Net Income | $ | 72,876 | $ | 67,239 | $ | 2,670 | $ | 19,732 | ||||
| Earnings allocated to Preferred Stock | (21,063 | ) | (30,503 | ) | (5,266 | ) | (7,817 | ) | ||||
| Net Income / (Loss) available to common stockholders | $ | 51,813 | $ | 36,736 | $ | (2,596 | ) | $ | 11,915 | |||
| Earnings / (Losses) per common share, basic and diluted | $ | 0.52 | $ | 0.33 | $ | (0.02 | ) | $ | 0.11 | |||
| Weighted average number of shares, basic and diluted | 100,527,907 | 110,395,134 | 107,661,705 | 111,951,107 | ||||||||
COSTAMARE INC.
Consolidated Balance Sheets
| As of December 31, | As of December 31, | ||||
| (Expressed in thousands of U.S. dollars) | 2017 | 2018 | |||
| ASSETS | (Unaudited) | ||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | $ | 178,986 | $ | 113,714 | |
| Restricted cash | 7,238 | 5,600 | |||
| Accounts receivable | 1,324 | 5,625 | |||
| Inventories | 9,662 | 11,020 | |||
| Due from related parties | 5,273 | 4,681 | |||
| Fair value of derivatives | 112 | 3,514 | |||
| Insurance claims receivable | 2,091 | 6,476 | |||
| Prepaid lease rentals | 8,752 | 8,752 | |||
| Asset held for sale | 7,315 | 4,838 | |||
| Accrued charter revenue | 185 | – | |||
| Time charter assumed | – | 190 | |||
| Prepayments and other | 5,697 | 6,358 | |||
| Total current assets | $ | 226,635 | $ | 170,768 | |
| FIXED ASSETS, NET: | |||||
| Capital leased assets | $ | 415,665 | $ | 401,901 | |
| Vessels and advances, net | 1,579,509 | 2,206,786 | |||
| Total fixed assets, net | $ | 1,995,174 | $ | 2,608,687 | |
| NON-CURRENT ASSETS: | |||||
| Equity method investments | $ | 161,897 | $ | 131,082 | |
| Prepaid lease rentals, non-current | 42,918 | 34,167 | |||
| Deferred charges, net | 15,429 | 26,250 | |||
| Accounts receivable, non-current | 1,800 | 17,789 | |||
| Restricted cash | 32,661 | 47,177 | |||
| Fair value of derivatives, non-current | 4,358 | 3,727 | |||
| Time charter assumed, non-current | – | 1,222 | |||
| Other non-current assets | 9,426 | 9,942 | |||
| Total assets | $ | 2,490,298 | $ | 3,050,811 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Current portion of long-term debt | $ | 206,318 | $ | 149,162 | |
| Accounts payable | 6,314 | 8,586 | |||
| Due to related parties | 203 | 196 | |||
| Capital lease obligations | 32,874 | 34,299 | |||
| Accrued liabilities | 10,755 | 17,624 | |||
| Unearned revenue | 15,310 | 12,432 | |||
| Fair value of derivatives | 3,307 | – | |||
| Other current liabilities | 1,627 | 2,370 | |||
| Total current liabilities | $ | 276,708 | $ | 224,669 | |
| NON-CURRENT LIABILITIES | |||||
| Long-term debt, net of current portion | $ | 644,662 | $ | 1,159,244 | |
| Capital lease obligations, net of current portion | 339,332 | 305,033 | |||
| Unearned revenue, net of current portion | 11,057 | 4,741 | |||
| Total non-current liabilities | $ | 995,051 | $ | 1,469,018 | |
| COMMITMENTS AND CONTINGENCIES | |||||
| STOCKHOLDERS’ EQUITY: | |||||
| Preferred stock | $ | – | $ | – | |
| Common stock | 11 | 11 | |||
| Additional paid-in capital | 1,175,774 | 1,313,840 | |||
| Retained earnings | 43,723 | 38,734 | |||
| Accumulated other comprehensive loss | (969 | ) | 4,539 | ||
| Total stockholders’ equity | $ | 1,218,539 | $ | 1,357,124 | |
| Total liabilities and stockholders’ equity | $ | 2,490,298 | $ | 3,050,811 | |
