Costamare Reports First Quarter Results Above Analysts' Expectations

Container ship owner sees good demand balance with better rates on post-panamax vessels.

Costamare CMRE reported first quarter 2019 results that beat analysts expectations as the container ship owner said the supply and demand balance for boxships looks good going forward.

Costamare reported adjusted net income to common shareholders of $13.6 million for the first quarter, or $0.12 per share, essentially flat with the year earlier adjusted income.

Still, the first quarter number was better than the  $0.09 per share estimate from analysts.

"During the first quarter of the year the company delivered solid results," said Gregory Zikos, Chief Financial Officer of the Monaco-based Costamare.

Including non-cash items such as loss on the sale of a container ship, the company reported a $9.3 million loss to common shareholders.   

Revenue from chartering container ships to liner operators came in at $113 million for the quarter, a gain of 22 percent. The company credited the gain to the addition of 10 vessels to its fleet since the first quarter of 2018 and decreased idle days for its other vessels. Those gains were offset by decreases in charter rates for other vessels and the loss of revenue from two ships sold for demolition in the first quarter.

The company extended or entered charter agreements for 10 "post-panamax" vessels during the quarter. It said the rates for those vessels, which are above 5,500 twenty foot equivalent (TEUs) in capacity, saw "substantial increases" compared to their prior employment.

"The larger vessels continue to benefit from strong fundamentals with low supply and strong demand," Zikos commented. "The number of idle ships has fallen across all vessel segments as liner companies launch new services.

"We have 15 post-panamax ships opening over the next year which positions us favorably, should market momentum continue," he added.

Costamare said it will install scrubbers on five 14,424-TEU capacity ships chartered to Mediterranean Shipping Company (MSC). The roll-out is part of MSC's plan to use exhaust gas scrubbers across a part of its fleet to meet the International Maritime Organization's (IMO) upcoming limit of sulfur emissions (IMO 2020).

MSC will agree to pay a higher charter rate and hire the vessels for a longer period to finance the installations.  

Image sourced from Pixabay

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