MONACO, Oct. 23, 2019 (GLOBE NEWSWIRE) -- Costamare Inc. ("Costamare" or the "Company") CMRE today reported unaudited financial results for the third quarter and nine-months ended September 30, 2019.
- Net Income increased by 157% to $36.0 million for the three-months ended September 30, 2019 ("Q3 2019") compared to $14.0 million for the three-months ended September 30, 2018 ("Q3 2018"). Earnings per Share available to common stockholders increased by 300% to $0.24 in Q3 2019 compared to $0.06 in Q3 2018.
- Adjusted Net Income available to common stockholders(1) increased by 215% to $30.9 million in Q3 2019 compared to $9.8 million in Q3 2018. Adjusted Earnings per Share(1) available to common stockholders increased by 189% to $0.26 in Q3 2019 compared to $0.09 in Q3 2018.
- Voyage Revenues increased by 36% to $123.6 million in Q3 2019 compared to $90.9 million in Q3 2018.
- Chartered in total 14 vessels over the quarter, benefiting from a rising market in the larger asset classes.
- 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 and Adjusted Earnings per Share are non-GAAP measures and should not be used in isolation or as substitutes for Costamare's financial results presented in accordance with U.S. generally accepted accounting principles ("GAAP"). For the definition and reconciliation of these measures to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to Exhibit I.
New Business Developments
A. New charter agreements
- The Company has chartered in total 14 vessels over the quarter. More specifically, the Company:
I. Vessels above 5,500 TEU capacity (Post – Panamax)
- Agreed to charter the 2016-built, 11,010 TEU containership Cape Akritas with ZIM for a period of 10 to 11.5 months at charterers' option, at a daily rate of $43,250.
- Agreed to charter the 2017-built, 11,010 TEU containership Cape Kortia with ZIM for a period of 10 to 11.5 months at charterers' option, at a daily rate of $43,250.
- Agreed to extend the charter of the 2003-built, 5,928 TEU containership Venetiko with Hapag Lloyd for a period starting from November 1, 2019 and expiring at charterers' option during the period from August 20, 2020 to November 1, 2020, at a daily rate of $20,000.
- Agreed to extend the charter of the 2001-built, 5,576 TEU containership Ensenada with ONE for a period starting from October 1, 2019 and expiring at charterers' option during the period from May 1, 2020 to June 30, 2020, at a daily rate of $21,000.
II. Vessels below 5,500 TEU capacity
- Extended the charters of the 2002-built, 4,992 TEU containerships ZIM New York and ZIM Shanghai with ZIM for an additional one-year period expiring on October 1, 2020 at a daily rate of $12,430 per vessel starting from October 2, 2019.
- Agreed to extend the charter of the 2002-built, 4,132 TEU containership Ulsan with Maersk for a period of 20 to 24 months at charterers' option, starting from October 20, 2019 at a daily rate of $12,000.
- Agreed to extend the charter of the 2004-built, 2,586 TEU containership Lakonia with Evergreen for a period of 6 to 9 months at charterers' option, starting from September 27, 2019.
- Agreed to extend the charter of the 2000-built, 2,474 TEU containership Areopolis with Evergreen for a period of 6 to 9 months at charterers' option, starting from September 21, 2019.
- Agreed to extend the charter of the 1997-built, 2,458 TEU containership Messini with Evergreen for a period of 6 to 9 months at charterers' option, starting from September 3, 2019 at a daily rate of $8,650.
- Agreed to extend the charter of the 1991-built, 2,023 TEU containership MSC Namibia II with MSC for a period starting from September 2, 2019 and expiring at charterers' option during the period from November 5, 2019 to November 20, 2019, at a daily rate of $8,000.
- Agreed to extend the charter of the 2000-built, 1,645 TEU containership Neapolis with Evergreen for a period starting from September 14, 2019 and expiring at charterers' option during the period from January 5, 2020 to January 15, 2020, at a daily rate of $8,000.
- Agreed to extend the charter of the 1996-built, 1,504 TEU containership Prosper with Evergreen for a period of 6 to 9 months at charterers' option, starting from August 28, 2019 at a daily rate of $7,100.
- Agreed to extend the charter of the 2008-built, 1,300 TEU containership Michigan with MSC for a period of 11 to 13 months at charterers' option, starting from October 15, 2019 at a daily rate of $6,650.
B. Dividend announcements
- On October 2, 2019, we declared a dividend for the quarter ended September 30, 2019, of $0.10 per share on our common stock, payable on November 7, 2019, to stockholders of record of common stock as of October 22, 2019.
- On October 2, 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 October 15, 2019 to holders of record as of October 11, 2019.
C. New Financing Agreements
- In July 2019, we concluded the refinancing for an amount of up to $94 million of the indebtedness of the 2013-built 8,827 TEU capacity containerships Valor and Valiant with a leading European financial institution.
D. Vessel disposals
- In October 2019, we agreed to sell the 1991-built, 2,023 TEU capacity containership Sierra II (ex. MSC Sierra II). The sale is expected to be completed in October 2019.
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
"During the third quarter of the year the Company delivered profitable results. As was the case in the previous quarter, net income and earnings per share more than doubled, boosted by increased charter rates and the addition of new ships.
Charter rates for the larger container ships continued to improve and there is limited supply available for the post -panamax sizes.
Over the quarter, we chartered in total 14 vessels benefiting from a rising rate environment.
We have 18 post -panamax ships coming off charter over the next year which positions us favorably, should market momentum continue."
Financial Summary
| Nine-month period ended September 30, | Three-month period ended September 30, | |||||||||||||||||||||||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share data): | 2018 | 2019 | 2018 | 2019 | ||||||||||||||||||||||||||||
| Voyage revenue | $274,244 | $353,641 | $90,913 | $123,631 | ||||||||||||||||||||||||||||
| Accrued charter revenue (1) | $(5,031 | ) | $(115 | ) | $(1,464 | ) | $(306 | ) | ||||||||||||||||||||||||
| Amortization of Time-charter assumed | - | $143 | - | $48 | ||||||||||||||||||||||||||||
| Voyage revenue adjusted on a cash basis (2) | $269,213 | $353,669 | $89,449 | $123,373 | ||||||||||||||||||||||||||||
| Adjusted Net Income available to common stockholders (3) | $33,598 | $66,700 | $9,763 | $30,948 | ||||||||||||||||||||||||||||
| Weighted Average number of shares | 109,870,776 | 114,744,125 | 110,913,448 | 117,111,191 | ||||||||||||||||||||||||||||
| Adjusted Earnings per share (3) | $0.31 | $0.58 | $0.09 | $0.26 | ||||||||||||||||||||||||||||
| Net Income | $47,507 | $63,112 | $14,040 | $35,976 | ||||||||||||||||||||||||||||
| Net Income available to common stockholders | $24,821 | $39,660 | $6,136 | $28,072 | ||||||||||||||||||||||||||||
| Weighted Average number of shares | 109,870,776 | 114,744,125 | 110,913,448 | 117,111,191 | ||||||||||||||||||||||||||||
| Earnings per share | $0.23 | $0.35 | $0.06 | $0.24 | ||||||||||||||||||||||||||||
(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- and nine-month periods ended September 30, 2019 and 2018. 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
| Nine-month period ended September 30, | Three-month period ended September 30, | |||||||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share data) | 2018 | 2019 | 2018 | 2019 | ||||||||||||
| Net Income | $ | 47,507 | $ | 63,112 | $ | 14,040 | $ | 35,976 | ||||||||
| Earnings allocated to Preferred Stock | (22,686 | ) | (23,452 | ) | (7,904 | ) | (7,904 | ) | ||||||||
| Net Income available to common stockholders | 24,821 | 39,660 | 6,136 | 28,072 | ||||||||||||
| Accrued charter revenue | (5,031 | ) | (115 | ) | (1,464 | ) | (306 | ) | ||||||||
| General and administrative expenses – non-cash component | 3,098 | 2,453 | 971 | 908 | ||||||||||||
| Non-recurring, non-cash write-off of loan deferred financing costs | - | 1,127 | - | 1,127 | ||||||||||||
| Amortization of prepaid lease rentals, net | 6,095 | - | 2,054 | - | ||||||||||||
| Amortization of Time charter assumed | - | 143 | - | 48 | ||||||||||||
| Realized loss on Euro/USD forward contracts (1) | 97 | 367 | 250 | 159 | ||||||||||||
| Vessels' impairment loss | - | 3,042 | - | - | ||||||||||||
| Loss on sale / disposal of vessels | 861 | 18,420 | - | - | ||||||||||||
| Swaps' breakage costs | 1,234 | 16 | - | 16 | ||||||||||||
| Loss on vessels' held for sale | 1,919 | 480 | 1,919 | 480 | ||||||||||||
| Loss on sale / disposal of vessel by a jointly owned company with York included in equity gain on investments | - | 38 | - | - | ||||||||||||
| (Gain) / Loss on asset held for sale by a jointly owned company with York included in equity gain on investments | 664 | - | (4 | ) | - | |||||||||||
| (Gain) / loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1) | (160 | ) | 1,069 | (99 | ) | 444 | ||||||||||
| Adjusted Net Income available to common stockholders | $ | 33,598 | $ | 66,700 | $ | 9,763 | $ | 30,948 | ||||||||
| Adjusted Earnings per Share | $ | 0.31 | $ | 0.58 | $ | 0.09 | $ | 0.26 | ||||||||
| Weighted average number of shares | 109,870,776 | 114,744,125 | 110,913,448 | 117,111,191 | ||||||||||||
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 loss on Euro/USD forward contracts, vessels' impairment loss, loss on sale / disposal of vessels, swaps' breakage costs, loss on vessels held for sale, loss on sale / disposal of vessel by a jointly owned company with York included in equity gain on investments, (gain) / loss on asset held for sale by a jointly owned company with York included in equity gain on investments, non-cash general and administrative expenses and non-cash other items, non-recurring, non-cash write-off of loan deferred financing costs, amortization of prepaid lease rentals, net, amortization of Time charter assumed 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 September 30, 2019 compared to the three-month period ended September 30, 2018
During the three-month periods ended September 30, 2019 and 2018, we had an average of 60.0 and 55.8 vessels, respectively, in our fleet. In the three-month period ended September 30, 2018, we accepted delivery of the secondhand containerships Megalopolis, Marathopolis, Maersk Kleven and Maersk Kotka with an aggregate TEU capacity of 26,002. In the three-month periods ended September 30, 2019 and 2018, our fleet ownership days totaled 5,520 and 5,136 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 September 30, | Change | Percentage Change | |||||||||
| 2018 | 2019 | |||||||||||
| Voyage revenue | $ | 90.9 | $ | 123.6 | $ | 32.7 | 36.0% | |||||
| Voyage expenses | (1.9 | ) | (0.7 | ) | (1.2 | ) | (63.2%) | |||||
| Voyage expenses – related parties | (0.8 | ) | (1.7 | ) | 0.9 | 112.5% | ||||||
| Vessels' operating expenses | (27.4 | ) | (29.2 | ) | 1.8 | 6.6% | ||||||
| General and administrative expenses | (1.3 | ) | (1.5 | ) | 0.2 | 15.4% | ||||||
| Management fees – related parties | (5.0 | ) | (5.3 | ) | 0.3 | 6.0% | ||||||
| General and administrative expenses - non-cash component | (1.0 | ) | (0.9 | ) | (0.1 | ) | (10.0%) | |||||
| Amortization of dry-docking and special survey costs | (1.8 | ) | (2.3 | ) | 0.5 | 27.8% | ||||||
| Depreciation | (23.8 | ) | (25.3 | ) | 1.5 | 6.3% | ||||||
| Amortization of prepaid lease rentals, net | (2.0 | ) | - | (2.0 | ) | n.m. | ||||||
| Loss on vessels held for sale | (1.9 | ) | (0.5 | ) | (1.4 | ) | (73.7%) | |||||
| Interest income | 0.8 | 0.8 | - | - | ||||||||
| Interest and finance costs | (14.9 | ) | (24.0 | ) | 9.1 | 61.1% | ||||||
| Swaps' breakage costs | - | - | ||||||||||
| Equity gain on investments | 3.9 | 3.1 | (0.8 | ) | (20.5%) | |||||||
| Other | 0.1 | 0.3 | 0.2 | n.m. | ||||||||
| Gain / (Loss) on derivative instruments | 0.1 | (0.4 | ) | (0.5 | ) | n.m. | ||||||
| Net Income | $ | 14.0 | $ | 36.0 | ||||||||
| (Expressed in millions of U.S. dollars, except percentages) | Three-month period ended September 30, | Change | Percentage Change | |||||||||
| 2018 | 2019 | |||||||||||
| Voyage revenue | $ | 90.9 | $ | 123.6 | $ | 32.7 | 36.0 | % | ||||
| Accrued charter revenue | (1.5 | ) | (0.3 | ) | (1.2 | ) | (80.0 | %) | ||||
| Amortization of Time-charter assumed | - | - | - | - | ||||||||
| Voyage revenue adjusted on a cash basis (1) | $ | 89.4 | $ | 123.3 | $ | 33.9 | 37.9 | % | ||||
| Vessels' operational data | Three-month period ended September 30, | Percentage Change | ||||||||
| 2018 | 2019 | Change | ||||||||
| Average number of vessels | 55.8 | 60.0 | 4.2 | 7.5 | % | |||||
| Ownership days | 5,136 | 5,520 | 384 | 7.5 | % | |||||
| Number of vessels under dry-docking | 4 | - | (4 | ) | ||||||
(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles ("GAAP"). Refer to "Financial Summary" above for the reconciliation of Voyage revenue adjusted on a cash basis.
Voyage Revenue
Voyage revenue increased by 36.0%, or $32.7 million, to $123.6 million during the three-month period ended September 30, 2019, from $90.9 million during the three-month period ended September 30, 2018. The increase is mainly attributable to revenue earned by (i) nine vessels acquired during the six-month period ended December 31, 2018, (ii) decreased off-hire days for certain of our vessels and increased charter rates for certain of our vessels during the three-month period ended September 30, 2019 compared to the three-month period ended September 30, 2018; partly offset by revenue not earned by two vessels sold in the first quarter of 2019.
Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 37.9%, or $33.9 million, to $123.3 million during the three-month period ended September 30, 2019, from $89.4 million during the three-month period ended September 30, 2018. Accrued charter revenue for the three-month periods ended September 30, 2019 and 2018 was a negative amount of $0.3 million and $1.5 million, respectively.
Voyage Expenses
Voyage expenses were $0.7 million and $1.9 million for the three-month periods ended September 30, 2019 and 2018, 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 $1.7 million and $0.8 million for the three-month periods ended September 30, 2019 and 2018, respectively. Voyage expenses – related parties represent (i) fees of 1.25% (0.75% until June 30, 2019) in the aggregate on voyage revenues charged by related managers and (ii) charter brokerage fees payable to a related charter brokerage company.
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 $29.2 million and $27.4 million during the three-month periods ended September 30, 2019 and 2018, respectively. Daily vessels' operating expenses were $5,282 and $5,332 for the three-month periods ended September 30, 2019 and 2018, respectively. Daily operating expenses are calculated as vessels' operating expenses for the period over the ownership days of the period.
General and Administrative Expenses
General and administrative expenses were $1.5 million and $1.3 million during the three-month periods ended September 30, 2019 and 2018, respectively, and both include $0.63 million paid to a related manager.
Management Fees – related parties
Management fees paid to our related managers were $5.3 million and $5.0 million during the three-month periods ended September 30, 2019 and 2018, respectively.
General and administrative expenses – non-cash component
General and administrative expenses – non-cash component for the three-month period ended September 30, 2019 amounted to $0.9 million, representing the value of the shares issued to a related manager on September 30, 2019. General and administrative expenses – non-cash component for the three-month period ended September 30, 2018 amounted to $1.0 million, representing the value of the shares issued to a related manager on September 28, 2018.
Amortization of dry-docking and special survey
Amortization of deferred dry-docking and special survey costs was $2.3 million and $1.8 million during the three-month periods ended September 30, 2019 and 2018, respectively. During the three-month period ended September 30, 2018, two vessels underwent and completed their special survey and two were in process of completing their special survey. During the three-month period ended September 30, 2019, no vessel underwent any special survey.
Depreciation
Depreciation expense for the three-month period ended September 30, 2019 and 2018 was $25.3 million and $23.8 million, respectively. The increase was partly attributable to the increased average number of vessels during the three-month period ended September 30, 2019 compared to the three-month period ended September 30, 2018.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net for the three-month periods ended September 30, 2019 and 2018 was nil and $2.0 million, respectively.
Loss on vessels held for sale
During the three-month period ended September 30, 2019, we recorded a loss on vessels held for sale of $0.5 million representing the expected loss from sale of two of our vessels during the next twelve-month period. During the three-month period ended September 30, 2018, we recorded a loss on vessel held for sale of $1.9 million representing the expected loss from sale of one of our vessels during the next twelve-month period.
Interest Income
Interest income amounted to $0.8 million for each of the three-month periods ended September 30, 2019 and 2018, respectively.
Interest and Finance Costs
Interest and finance costs were $24.0 million and $14.9 million during the three-month periods ended September 30, 2019 and 2018, respectively. The increase is mainly attributable to the increased average loan balance during the three-month period ended September 30, 2019 compared to the three-month period ended September 30, 2018.
Swaps' Breakage Costs
During the three-month period ended September 30, 2019, we terminated eight interest rate derivative instruments that qualified for hedge accounting and three that did not qualify for hedge accounting and we paid the counterparties breakage costs, net in the amount of $0.016 million in the aggregate.
Equity Gain on Investments
During the three-month period ended September 30, 2019, we recorded an equity gain on investments of $3.1 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 (the "Framework Deed"), with York Capital Management Global Advisors LLC and an affiliated fund (collectively, together with the funds it manages or advises, "York"). Since November 12, 2018, we have held 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 September 30, 2019, 13 companies are jointly owned with York. During the three-month period ended September 30, 2018, we recorded an equity gain on investments of $3.9 million also relating to investments under the Framework Deed.
Gain / (Loss) on Derivative Instruments
The fair value of our four interest rate derivative instruments which were outstanding as of September 30, 2019 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2019, the fair value of these four interest rate derivative instruments in aggregate amounted to a net asset of $0.1 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 September 30, 2019, a net loss of $0.4 million has been included in OCI and a net loss of $0.2 million has been included in Gain / (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 September 30, 2019.
Cash Flows
Three-month periods ended September 30, 2019 and 2018
| Condensed cash flows | Three-month period ended September 30, | |||||||
| (Expressed in millions of U.S. dollars) | 2018 | 2019 | ||||||
| Net Cash Provided by Operating Activities | $38.8 | $66.4 | ||||||
| Net Cash Used in Investing Activities | $(48.6 | ) | $(0.4 | ) | ||||
| Net Cash Provided by / (Used in) Financing Activities | $4.7 | $(145.7 | ) | |||||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended September 30, 2019 increased by $27.6 million to $66.4 million, from $38.8 million for the three-month period ended September 30, 2018. The increase is mainly attributable to the increased cash from operations of $33.9 million, the favorable 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 $2.7 million and the decreased special survey costs of $3.5 million during the three-month period ended September 30, 2019 compared to the three-month period ended September 30, 2018; partly off-set by increased payments for interest (including swap payments) during the period of $5.2 million.
Net Cash Used in Investing Activities
Net cash used in investing activities was $0.4 million in the three-month period ended September 30, 2019, which mainly consisted of dividend distributions we received from 10 entities jointly owned with York pursuant to the Framework Deed and advance payments for upgrades for certain of our vessels.
Net cash used in investing activities was $48.6 million in the three-month period ended September 30, 2018, which mainly consisted of net payments in relation to the acquisition of four secondhand vessels and five newbuild vessels and payment for capital injection into one entity pursuant to the Framework Deed.
Net Cash Provided by / (Used in) Financing Activities
Net cash used in financing activities was $145.7 million in the three-month period ended September 30, 2019, which mainly consisted of (a) $128.4 million of net payments relating to our debt financing agreements, (b) $7.0 million we paid for dividends to holders of our common stock for the second quarter of 2019 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"), $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock ("Series D Preferred Stock") and $2.5 million we paid for dividends to holders of our 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock ("Series E Preferred Stock") for the period from April 15, 2019 to July 14, 2019.
Net cash provided by financing activities was $4.7 million in the three-month period ended September 30, 2018, which mainly consisted of (a) $18.0 million net proceeds we received relating to our debt financing agreements, (b) $4.9 million we paid for dividends to holders of our common stock for the second 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 $2.5 million we paid for dividends to holders of our Series E Preferred Stock for the period from April 15, 2018 to July 14, 2018.
Nine-month period ended September 30, 2019 compared to the nine-month period ended September 30, 2018
During the nine-month periods ended September 30, 2019 and 2018, we had an average of 60.6 and 54.4 vessels, respectively, in our fleet. In the nine-month period ended September 30, 2019, we sold the container vessels MSC Pylos and Piraeus with an aggregate capacity of 7,012 TEU. In the nine-month period ended September 30, 2018, 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 we sold the container vessel Itea with a capacity of 3,842 TEU. In the nine-month periods ended September 30, 2019 and 2018, our fleet ownership days totaled 16,555 and 14,854 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) | Nine-month period ended September 30, | Change | Percentage Change | |||||||||
| 2018 | 2019 | |||||||||||
| Voyage revenue | $ | 274.2 | $ | 353.6 | $ | 79.4 | 29.0% | |||||
| Voyage expenses | (4.9 | ) | (3.2 | ) | (1.7 | ) | (34.7%) | |||||
| Voyage expenses – related parties | (2.3 | ) | (3.6 | ) | 1.3 | 56.5% | ||||||
| Vessels' operating expenses | (80.2 | ) | (87.3 | ) | 7.1 | 8.9% | ||||||
| General and administrative expenses | (4.1 | ) | (4.1 | ) | - | - | ||||||
| Management fees – related parties | (14.5 | ) | (16.2 | ) | 1.7 | 11.7% | ||||||
| General and administrative expenses - non-cash component | (3.1 | ) | (2.5 | ) | (0.6 | ) | (19.4%) | |||||
| Amortization of dry-docking and special survey costs | (5.2 | ) | (6.7 | ) | 1.5 | 28.8% | ||||||
| Depreciation | (69.8 | ) | (85.1 | ) | 15.3 | 21.9% | ||||||
| Amortization of prepaid lease rentals, net | (6.1 | ) | - | (6.1 | ) | n.m. | ||||||
| Loss on sale / disposal of vessels | (0.9 | ) | (18.4 | ) | 17.5 | n.m. | ||||||
| Loss on vessels held for sale | (1.9 | ) | (0.5 | ) | (1.4 | ) | (73.7%) | |||||
| Vessels' impairment loss | - | (3.0 | ) | 3.0 | n.m. | |||||||
| Interest income | 2.6 | 2.5 | (0.1 | ) | (3.8%) | |||||||
| Interest and finance costs | (44.2 | ) | (69.3 | ) | 25.1 | 56.8% | ||||||
| Swaps' breakage costs | (1.2 | ) | - | (1.2 | ) | n.m. | ||||||
| Equity gain on investments | 9.1 | 7.4 | (1.7 | ) | (18.7%) | |||||||
| Other | 0.2 | 0.5 | 0.3 | n.m. | ||||||||
| Loss on derivative instruments | (0.2 | ) | (1.0 | ) | 0.8 | n.m. | ||||||
| Net Income | $ | 47.5 | $ | 63.1 | ||||||||
| (Expressed in millions of U.S. dollars, except percentages) | Nine-month period ended September 30, | Change | Percentage Change | ||||||||||||||
| 2018 | 2019 | ||||||||||||||||
| Voyage revenue | $ | 274.2 | $ | 353.6 | $ | 79.4 | 29.0% | ||||||||||
| Accrued charter revenue | (5.0 | ) | (0.1 | ) | (4.9 | ) | (98.0%) | ||||||||||
| Amortization of Time-charter assumed | - | 0.2 | 0.2 | n.m. | |||||||||||||
| Voyage revenue adjusted on a cash basis (1) | $ | 269.2 | $ | 353.7 | $ | 84.5 | 31.4% | ||||||||||
| Vessels' operational data | Nine-month period ended September 30, | Percentage Change | |||||||||||||||
| 2018 | 2019 | Change | |||||||||||||||
| Average number of vessels | 54.4 | 60.6 | 6.2 | 11.4% | |||||||||||||
| Ownership days | 14,854 | 16,555 | 1,701 | 11.5% | |||||||||||||
| Number of vessels under dry-docking | 15 | 6 | (9 | ) | |||||||||||||
(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles ("GAAP"). Refer to "Financial Summary" above for the reconciliation of Voyage revenue adjusted on a cash basis.
Voyage Revenue
Voyage revenue increased by 29.0%, or $79.4 million, to $353.6 million during the nine-month period ended September 30, 2019 from $274.2 million during the nine-month period ended September 30, 2018. The increase is mainly attributable to revenue earned by (i) nine vessels acquired during the six-month period ended December 31, 2018 and (ii) decreased off-hire days for certain of our vessels during the nine-month period ended September 30, 2019 compared to the nine-month period ended September 30, 2018; partly offset by decreased charter rates for certain of our vessels and revenue not earned by two vessels sold in June and October 2018 and two vessels sold in March 2019.
Voyage revenue adjusted on a cash basis (which eliminates non-cash "Accrued charter revenue"), increased by 31.4%, or $84.5 million, to $353.7 million during the nine-month period ended September 30, 2019 from $269.2 million during the nine-month period ended September 30, 2018. Accrued charter revenue for the nine-month periods ended September 30, 2019 and 2018 was a negative amount of $0.1 million and $5.0 million, respectively.
Voyage Expenses
Voyage expenses were $3.2 million and $4.9 million for the nine-month periods ended September 30, 2019 and 2018, 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 $3.6 million and $2.3 million for the nine-month periods ended September 30, 2019 and 2018, respectively. Voyage expenses – related parties represent (i) fees of 1.25% (0.75% up to June 30, 2019) in the aggregate on voyage revenues charged by related managers and (ii) charter brokerage fees payable to a related charter brokerage company.
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 $87.3 million and $80.2 million during the nine-month periods ended September 30, 2019 and 2018, respectively. Daily vessels' operating expenses were $5,275 and $5,401 for the nine-month periods ended September 30, 2019 and 2018, respectively. Daily vessels' operating expenses are calculated as vessels' operating expenses for the period over the ownership days of the period.
General and Administrative Expenses
General and administrative expenses were $4.1 million for each of the nine-month periods ended September 30, 2019 and 2018, respectively, and both include $1.9 million which is part of the annual fee paid to a related manager.
Management Fees – related parties
Management fees paid to our managers were $16.2 million and $14.5 million during the nine-month periods ended September 30, 2019 and 2018, respectively.
General and administrative expenses – non-cash component
General and administrative expenses – non-cash component for the nine-month period ended September 30, 2019 amounted to $2.5 million representing the value of the shares issued to a related manager on March 29, 2019, June 28, 2019 and September 30, 2019. General and administrative expenses – non-cash component for the nine-month period ended September 30, 2018 amounted to $3.1 million representing the value of the shares issued to a related manager on March 30, 2018, June 29, 2018 and September 28, 2018.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special survey costs was $6.7 million and $5.2 million during the nine-month periods ended September 30, 2019 and 2018, respectively. During the nine-month period ended September 30, 2019, 6 vessels underwent and completed their special survey. During the nine-month period ended September 30, 2018, 13 vessels underwent and completed their special survey and two were in process of completing their special survey.
Depreciation
Depreciation expense for the nine-month period ended September 30, 2019 and 2018 was $85.1 million and $69.8 million, respectively. The increase was partly attributable to the increased average number of vessels during the nine-month period ended September 30, 2019 compared to the nine-month period ended September 30, 2018.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net for the nine-month periods ended September 30, 2019 and 2018 was nil and $6.1 million, respectively.
Loss on sale / disposal of vessels
During the nine-month period ended September 30, 2019, we recorded an aggregate loss of $18.4 million from the sale of the container vessels Piraeus and MSC Pylos. MSC Pylos was classified as asset held for sale as at December 31, 2018. During the nine-month period ended September 30, 2018, we recorded a loss of $0.9 million from the sale of the vessel Itea, which was classified as Asset held for sale as at December 31, 2017.
Loss on vessels held for sale
During the nine-month period ended September 30, 2019, we recorded a loss on vessels held for sale of $0.5 million representing the expected loss from sale of two of our vessels during the next twelve-month period. During the nine-month period ended September 30, 2018, we recorded a loss on vessel held for sale of $1.9 million representing the expected loss from sale of one of our vessels during the next twelve-month period.
Vessels' impairment loss
During the nine-month period ended September 30, 2019, we recorded an impairment loss in relation to two of our vessels in the amount of $3.0 million, in the aggregate. During the nine-month period ended September 30, 2018, no impairment loss was recorded.
Interest Income
Interest income amounted to $2.5 million and $2.6 million for the nine-month periods ended September 30, 2019 and 2018, respectively.
Interest and Finance Costs
Interest and finance costs were $69.3 million and $44.2 million during the nine-month periods ended September 30, 2019 and 2018, respectively. The increase is mainly attributable to the increased average loan balance during the nine-month period ended September 30, 2019 compared to the nine-month period ended September 30, 2018.
Swaps Breakage Cost
During the nine-month period ended September 30, 2019, we terminated eight interest rate derivative instruments that qualified for hedge accounting and three that did not qualify for hedge accounting and we paid the counterparties breakage costs, net in the amount of $0.016 million in the aggregate. During the nine-month period ended September 30, 2018, we terminated three interest rate derivative instruments that qualified for hedge accounting and we paid the counterparties' breakage costs of $1.2 million.
Equity Gain on Investments
During the nine-month period ended September 30, 2019, we recorded an equity gain on investments of $7.4 million representing our share of the net gain in jointly owned companies pursuant to the Framework Deed. Since November 12, 2018, we have held 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 September 30, 2019, 13 companies are jointly owned with York. During the nine-month period ended September 30, 2018, we recorded an equity gain on investments of $9.1 million also relating to investments under the Framework Deed.
Loss on Derivative Instruments
The fair value of our four interest rate derivative instruments which were outstanding as of September 30, 2019 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2019, the fair value of these four interest rate derivative instruments in aggregate amounted to a net asset of $0.1 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 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 nine-month period ended September 30, 2019, a net loss of $6.2 million has been included in OCI and a net loss of $0.7 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 nine-month period ended September 30, 2019.
Cash Flows
Nine-month periods ended September 30, 2019 and 2018
| Condensed cash flows | Nine-month period ended September 30, | |||||||
| (Expressed in millions of U.S. dollars) | 2018 | 2019 | ||||||
| Net Cash Provided by Operating Activities | $105.8 | $173.6 | ||||||
| Net Cash Provided by / (Used in) Investing Activities | $(113.5 | ) | $8.9 | |||||
| Net Cash Used in Financing Activities | $(56.4 | ) | $(144.8 | ) | ||||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the nine-month period ended September 30, 2019 increased by $67.8 million to $173.6 million, compared to $105.8 million for the nine-month period ended September 30, 2018. The increase is mainly attributable to the increased cash from operations of $84.5 million, the favorable 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 $7.7 million and the decreased special survey costs of $8.4 million during the nine-month period ended September 30, 2019 compared to the nine-month period ended September 30, 2018; partly off-set by increased payments for interest (including swap payments) during the period of $19.5 million.
Net Cash Provided by / (Used in) Investing Activities
Net cash provided by investing activities was $8.9 million in the nine-month period ended September 30, 2019, which mainly consisted of proceeds we received from the sale of two vessels, dividend distribution we received from 11 entities jointly owned with York pursuant to the Framework Deed and advance payments for upgrades for certain of our vessels.
Net cash used in investing activities was $113.5 million in the nine-month period ended September 30, 2018, which mainly consisted of net payments relating to the acquisition of six secondhand vessels and five newbuild vessels, payments for capital injection into certain entities pursuant to the Framework Deed and proceeds we received from sale of one vessel.
Net Cash Used in Financing Activities
Net cash used in financing activities was $144.8 million in the nine-month period ended September 30, 2019, which mainly consisted of (a) $97.1 million of net payments relating to our debt financing agreements (including the prepayments following the sale of two container vessels during the three-month period ended March 31, 2019), (b) $20.4 million we paid for dividends to holders of our common stock for the fourth quarter of 2018, the first quarter of 2019 and the second quarter of 2019 and (c) $2.9 million we paid for dividends to holders of our Series B Preferred Stock, $6.4 million we paid for dividends to holders of our Series C Preferred Stock, $6.6 million we paid for dividends to holders of our Series D Preferred Stock and $7.5 million we paid for dividends to holders of our Series E Preferred Stock for the period from October 15, 2018 to January 14, 2019, January 15, 2019 to April 14, 2019, and April 15, 2019 to July 14, 2019.
Net cash used in financing activities was $56.4 million in the nine-month period ended September 30, 2018, which mainly consisted of (a) $130.2 million net payments relating to our debt financing agreements, (b) $111.2 million net proceeds we received from our public offering in January 2018, of 4.6 million shares of our Series E Preferred Stock, net of underwriting discounts and expenses incurred in the offering, (c) $14.1 million we paid for dividends to holders of our common stock for the fourth quarter of 2017, the first quarter of 2018 and the second quarter of 2018 and (d) $2.9 million we paid for dividends to holders of our Series B Preferred Stock, $6.4 million we paid for dividends to holders of our Series C Preferred Stock, $6.6 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, and April 15, 2018 to July 14, 2018, and $4.7 million we paid for dividends to holders of our Series E Preferred Stock, for the period from January 30, 2018 to April 14, 2018 and April 15, 2018 to July 14, 2018.
Liquidity and Unencumbered Vessels
Cash and cash equivalents
As of September 30, 2019, we had a total cash liquidity of $204.2 million, consisting of cash, cash equivalents and restricted cash.
Debt-free vessels
As of October 23, 2019, the following vessels were free of debt.
Unencumbered Vessels
(Refer to fleet list for full details)
| Vessel Name | Year Built | TEU Capacity | |||
| ETOILE (ex. CMA CGM ETOILE) | 2005 | 2,556 | |||
| KOKURA | 1997 | 7,403 | |||
| MICHIGAN | 2008 | 1,300 | |||
| ENSENADA (*) | 2001 | 5,576 | |||
| MONEMVASIA (*) | 1998 | 2,472 | |||
| ARKADIA (*) | 2001 | 1,550 | |||
(*) Vessels acquired pursuant to the Framework Deed with York.
Conference Call details:
On Thursday, October 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 October 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: 10136189.
Live webcast:
There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com). 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 75 containerships, with a total capacity of approximately 538,000 TEU, including five newbuild containerships currently under construction. Ten 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", "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: ir@costamare.com
Fleet List
The table below provides additional information, as of October 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/ZIM | 2016 | 11,010 | 39,500/43,250 | August 2020 (3) |
| 7 | CAPE TAINARO(i) | ZIM | 2017 | 11,010 | 39,500 | March 2020 |
| 8 | CAPE KORTIA(i) | Evergreen/ZIM | 2017 | 11,010 | 39,500/43,250 | August 2020 (3) |
| 9 | CAPE SOUNIO(i) | ZIM | 2017 | 11,010 | 33,500 | March 2020 |
| 10 | CAPE ARTEMISIO(i) | Hapag Lloyd | 2017 | 11,010 | 32,500 (net) | March 2020 |
| 11 | COSCO GUANGZHOU | COSCO | 2006 | 9,469 | 28,900 | April 2020 |
| 12 | COSCO NINGBO | COSCO | 2006 | 9,469 | 28,900 | April 2020 |
| 13 | COSCO YANTIAN | COSCO | 2006 | 9,469 | 28,900 | May 2020 |
| 14 | COSCO BEIJING | COSCO | 2006 | 9,469 | 28,900 | May 2020 |
| 15 | COSCO HELLAS | COSCO | 2006 | 9,469 | 28,900 | May 2020 |
| 16 | MSC AZOV | MSC | 2014 | 9,403 | 43,000 | December 2026(4) |
| 17 | MSC AJACCIO | MSC | 2014 | 9,403 | 43,000 | February 2027(4) |
| 18 | MSC AMALFI | MSC | 2014 | 9,403 | 43,000 | March 2027(4) |
| 19 | MSC ATHENS(ii) | MSC | 2013 | 8,827 | 42,000 | January 2026(5) |
| 20 | MSC ATHOS(ii) | MSC | 2013 | 8,827 | 42,000 | February 2026(5) |
| 21 | VALOR | Evergreen/Hapag Lloyd | 2013 | 8,827 | 41,700/34,500 | April 2023(6) |
| 22 | VALUE | Evergreen/Hapag Lloyd | 2013 | 8,827 | 41,700/34,500 | April 2023(6) |
| 23 | VALIANT | Evergreen/Hapag Lloyd | 2013 | 8,827 | 41,700/34,500 | June 2023(6) |
| 24 | VALENCE | Evergreen/Hapag Lloyd | 2013 | 8,827 | 41,700/34,500 | July 2023(6) |
| 25 | VANTAGE | Evergreen/Hapag Lloyd | 2013 | 8,827 | 41,700/34,500 | September 2023(6) |
| 26 | NAVARINO | Evergreen | 2010 | 8,531 | 21,900 | February 2020 |
| 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 | 17,050 | February 2020 |
| 31 | KURE | COSCO | 1996 | 7,403 | 21,500 | April 2020 |
| 32 | KOKURA | Maersk | 1997 | 7,403 | 17,050 | February 2020 |
| 33 | MSC METHONI | MSC | 2003 | 6,724 | 29,000 | September 2021 |
| 34 | YORK | MSC | 2000 | 6,648 | 11,450 | December 2019 |
| 35 | MAERSK KOBE | Maersk | 2000 | 6,648 | 17,000 | April 2020 |
| 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 | 20,000 | August 2020(9) |
| 43 | ENSENADA (i) | ONE | 2001 | 5,576 | 21,000 | May 2020 |
| 44 | ZIM NEW YORK | ZIM | 2002 | 4,992 | 12,430 | October 2020(10) |
| 45 | ZIM SHANGHAI | ZIM | 2002 | 4,992 | 12,430 | October 2020(10) |
| 46 | LEONIDIO(ii) | Maersk | 2014 | 4,957 | 14,200 | December 2024 |
| 47 | KYPARISSIA(ii) | Maersk | 2014 | 4,957 | 14,200 | November 2024 |
| 48 | MEGALOPOLIS | Maersk | 2013 | 4,957 | (*) | July 2025 |
| 49 | MARATHOPOLIS | Maersk | 2013 | 4.957 | (*) | July 2025 |
| 50 | OAKLAND EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | November 2019 |
| 51 | HALIFAX EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | October 2020 |
| 52 | SINGAPORE EXPRESS | Hapag Lloyd | 2000 | 4,890 | 10,000 | July 2020 |
| 53 | ULSAN | Maersk | 2002 | 4,132 | 12,000 | June 2021 |
| 54 | POLAR ARGENTINA(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | October 2024 |
| 55 | POLAR BRASIL(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | January 2025 |
| 56 | LAKONIA | Evergreen | 2004 | 2,586 | (*) | March 2020 |
| 57 | ETOILE (ex. CMA CGM ETOILE) | - | 2005 | 2,556 | - | - |
| 58 | AREOPOLIS | Evergreen | 2000 | 2,474 | (*) | March 2020 |
| 59 | MONEMVASIA(i) | Maersk | 1998 | 2,472 | 9,250 | November 2021 |
| 60 | MESSINI | Evergreen | 1997 | 2,458 | 8,650 | March 2020 |
| 61 | REUNION (ex. MSC REUNION) | - | 1992 | 2,024 | - | Vessel held for sale |
| 62 | MSC NAMIBIA II | MSC | 1991 | 2,023 | 8,000 | November 2019 |
| 63 | SIERRA II (ex. MSC SIERRA II) | - | 1991 | 2,023 | - | Vessel scheduled to be sold |
| 64 | NEAPOLIS | Evergreen | 2000 | 1,645 | 8,000 | January 2020 |
| 65 | ARKADIA(i) | Evergreen | 2001 | 1,550 | 9,450 | February 2020 |
| 66 | PROSPER | Evergreen | 1996 | 1,504 | 7,100 | February 2020 |
| 67 | MICHIGAN | MSC | 2008 | 1,300 | 6,650 | September 2020 |
| 68 | TRADER | - | 2008 | 1,300 | - | - |
| 69 | ZAGORA | MSC | 1995 | 1,162 | 6,500 | May 2020 |
| 70 | LUEBECK | MSC | 2001 | 1,078 | 6,200 | January 2020 |
Newbuilds
| Vessel Name | Shipyard | Capacity (TEU) | Charterer | Expected Delivery(11) | |
| 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. Amounts set out for current daily charter rate are the amounts contained in the charter contracts. |
| (2) | Charter terms and expiration dates are based on the earliest date charters could expire. |
| (3) | Upon redelivery of each vessel from Evergreen in October-November 2019, each vessel will commence a charter with ZIM at a daily rate of $43,250. Until then the daily charter rate of each vessel will be $39,500. |
| (4) | 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. |
| (5) | 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. |
| (6) | Upon redelivery of each vessel from Evergreen between April 2020 and January 2021, each vessel will commence a 3 year charter with Hapag Lloyd at a daily rate of $34,500. Until then the daily charter rate of each vessel will be $41,700. |
| (7) | The daily rate for Sealand Washington, Sealand Michigan and Sealand Illinois is 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 until expiry of the charter, 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. |
| (9) | This charter rate will be earned by Venetiko from November 1, 2019. Until then the daily charter rate will be $9,750. |
| (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 2019, 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 fifth optional year has been determined at $12,430 per day. |
| (11) | 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
| Nine-months ended September 30, | Three-months ended September 30, | |||||||||||
| (Expressed in thousands of U.S. dollars, except share and per share amounts) | 2018 | 2019 | 2018 | 2019 | ||||||||
| REVENUES: | ||||||||||||
| Voyage revenue | $ | 274,244 | $ | 353,641 | $ | 90,913 | $ | 123,631 | ||||
| EXPENSES: | ||||||||||||
| Voyage expenses | (4,894 | ) | (3,180 | ) | (1,857 | ) | (701 | ) | ||||
| Voyage expenses – related parties | (2,340 | ) | (3,610 | ) | (752 | ) | (1,658 | ) | ||||
| Vessels' operating expenses | (80,226 | ) | (87,322 | ) | (27,384 | ) | (29,158 | ) | ||||
| General and administrative expenses | (4,080 | ) | (4,115 | ) | (1,295 | ) | (1,464 | ) | ||||
| Management fees – related parties | (14,549 | ) | (16,164 | ) | (4,998 | ) | (5,337 | ) | ||||
| General and administrative expenses – non-cash component | (3,098 | ) | (2,453 | ) | (971 | ) | (908 | ) | ||||
| Amortization of dry-docking and special survey costs | (5,183 | ) | (6,737 | ) | (1,825 | ) | (2,266 | ) | ||||
| Depreciation | (69,766 | ) | (85,081 | ) | (23,803 | ) | (25,320 | ) | ||||
| Amortization of prepaid lease rentals, net | (6,095 | ) | - | (2,054 | ) | - | ||||||
| Loss on sale / disposal of vessels | (861 | ) | (18,420 | ) | - | - | ||||||
| Loss on vessels held for sale | (1,919 | ) | (480 | ) | (1,919 | ) | (480 | ) | ||||
| Vessels' impairment loss | - | (3,042 | ) | - | - | |||||||
| Foreign exchange gains / (losses) | (16 | ) | (28 | ) | 2 | (45 | ) | |||||
| Operating income | $ | 81,217 | $ | 123,009 | $ | 24,057 | $ | 56,294 | ||||
| OTHER INCOME / (EXPENSES): | ||||||||||||
| Interest income | $ | 2,634 | $ | 2,512 | $ | 756 | $ | 826 | ||||
| Interest and finance costs | (44,248 | ) | (69,342 | ) | (14,870 | ) | (24,026 | ) | ||||
| Swaps' breakage cost, net | (1,234 | ) | (16 | ) | - | (16 | ) | |||||
| Equity gain on investments | 9,114 | 7,409 | 3,915 | 3,110 | ||||||||
| Other | 231 | 561 | 136 | 234 | ||||||||
| Gain / (Loss) on derivative instruments | (207 | ) | (1,021 | ) | 46 | (446 | ) | |||||
| Total other expenses | $ | (33,710 | ) | $ | (59,897 | ) | $ | (10,017 | ) | $ | (20,318 | ) |
| Net Income | $ | 47,507 | $ | 63,112 | $ | 14,040 | $ | 35,976 | ||||
| Earnings allocated to Preferred Stock | (22,686 | ) | (23,452 | ) | (7,904 | ) | (7,904 | ) | ||||
| Net Income available to common stockholders | $ | 24,821 | $ | 39,660 | $ | 6,136 | $ | 28,072 | ||||
| Earnings per common share, basic and diluted | $ | 0.23 | $ | 0.35 | $ | 0.06 | $ | 0.24 | ||||
| Weighted average number of shares, basic and diluted | 109,870,776 | 114,744,125 | 110,913,448 | 117,111,191 | ||||||||
COSTAMARE INC.
Consolidated Balance Sheets
| As of December 31, | As of September 30, | ||||
| (Expressed in thousands of U.S. dollars) | 2018 | 2019 | |||
| ASSETS | (Unaudited) | ||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | $ | 113,714 | $ | 156,214 | |
| Restricted cash | 5,600 | 6,544 | |||
| Accounts receivable | 5,625 | 11,729 | |||
| Inventories | 11,020 | 9,790 | |||
| Due from related parties | 4,681 | 5,006 | |||
| Fair value of derivatives | 3,514 | 847 | |||
| Insurance claims receivable | 6,476 | 2,242 | |||
| Prepaid lease rentals | 8,752 | - | |||
| Asset held for sale | 4,838 | 6,183 | |||
| Time charter assumed | 190 | 192 | |||
| Prepayments and other | 6,358 | 6,171 | |||
| Total current assets | $ | 170,768 | $ | 204,918 | |
| FIXED ASSETS, NET: | |||||
| Right-of-use assets | $ | 401,901 | $ | 190,129 | |
| Vessels and advances, net | 2,206,786 | 2,410,324 | |||
| Total fixed assets, net | $ | 2,608,687 | $ | 2,600,453 | |
| NON-CURRENT ASSETS: | |||||
| Equity method investments | $ | 131,082 | $ | 123,737 | |
| Prepaid lease rentals, non-current | 34,167 | - | |||
| Deferred charges, net | 26,250 | 24,194 | |||
| Accounts receivable, non-current | 17,789 | 9,990 | |||
| Restricted cash | 47,177 | 41,450 | |||
| Fair value of derivatives, non-current | 3,727 | 266 | |||
| Time charter assumed, non-current | 1,222 | 1,078 | |||
| Other non-current assets | 9,942 | 10,372 | |||
| Total assets | $ | 3,050,811 | $ | 3,016,458 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Current portion of long-term debt | $ | 149,162 | $ | 198,441 | |
| Accounts payable | 8,586 | 5,965 | |||
| Due to related parties | 196 | 437 | |||
| Finance lease liabilities | 34,299 | 16,757 | |||
| Accrued liabilities | 17,624 | 17,269 | |||
| Unearned revenue | 12,432 | 10,380 | |||
| Fair value of derivatives | - | 628 | |||
| Other current liabilities | 2,370 | 2,097 | |||
| Total current liabilities | $ | 224,669 | $ | 251,974 | |
| NON-CURRENT LIABILITIES | |||||
| Long-term debt, net of current portion | $ | 1,159,244 | $ | 1,248,719 | |
| Finance lease liabilities, net of current portion | 305,033 | 124,145 | |||
| Fair value of derivatives, net of current portion | - | 631 | |||
| Unearned revenue, net of current portion | 4,741 | 3,154 | |||
| Total non-current liabilities | $ | 1,469,018 | $ | 1,376,649 | |
| COMMITMENTS AND CONTINGENCIES | |||||
| STOCKHOLDERS' EQUITY: | |||||
| Preferred stock | $ | - | $ | - | |
| Common stock | 11 | 12 | |||
| Additional paid-in capital | 1,313,840 | 1,345,064 | |||
| Retained earnings | 38,734 | 44,341 | |||
| Accumulated other comprehensive income / (loss) | 4,539 | (1,582 | ) | ||
| Total stockholders' equity | $ | 1,357,124 | $ | 1,387,835 | |
| Total liabilities and stockholders' equity | $ | 3,050,811 | $ | 3,016,458 | |
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