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Costamare (CMRE) Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 21, 2016 08:30 AM ET


Gregory Zikos - Chief Financial Officer


Donald McLee - Wells Fargo

Ben Nolan - Stifel

Sherif Elmaghrabi - Morgan Stanley

Amit Mehrotra - Deutsche Bank

Joe Nelson - Credit Suisse


Thank you for standing by ladies and gentlemen, and welcome to the Costamare, Incorporated Conference Call on the First Quarter of 2016 Financial Results. We have with us, Mr. Gregory Zikos, Chief Financial Officer of the Company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]

I must advise you that this conference is being recorded today Thursday, April 21, 2016. We would like to remind you that this conference call contains forward-looking statements. Please take a moment to read Slide number 2 of the presentation which contains the forward-looking statements.

And I will now pass the floor to your speaker today, Mr. Zikos. Please go ahead sir.

Gregory Zikos

Thank you and good morning, ladies and gentlemen. During the first quarter, the company delivered solid results. In a challenging market environment, we keep employing our vessels having chartered the total nine ships opening during the first three months of the year.

For the markets, charter and rates and asset values are at historically low levels as a result of weak demand. We believe that today’s environment provides attractive opportunities and the potential to increase our shareholders’ returns.

Moving now to the slide presentation. On Slide 3, we are providing a summary of the recent developments. On April 1, we declared a dividend for the first quarter of the year. This is $0.29 per share and it is payable on May 4th. We have also declared dividends on our B, C and D series of preferred stock.

In January, we extended the maturity of a credit facility for three years. This relates to a $42 million balloon, originally due in 2017, which has been extended till 2020.

On Slide 4, we are providing a summary of the chartering arrangements which took place during the quarter. We have re-chartered in total 11 ships from the beginning of the year

On Slide 5, you can see the first quarter 2016 results versus the same period of 2015. During the first quarter of this year, the company generated revenues of $120 million, EBITDA of $82 million and net income of $30 million.

For the same period of last year, the revenues amounted to $121 million and the EBITDA and net income to $82 million and $23 million respectively. Consistently with our previous press releases, we feel that the EBITDA and net income figures need to be adjusted for the following non-cash items; the accrued charter revenues have a discrepancy between the revenues received, the revenues accounted for, based on a straight-line amortization schedule, the gains or losses resulting from derivatives, the amortization of prepaid lease rentals, which is a non-cash charge, and the non-cash G&A expenses.

Based on the above, the first quarter EPS amounts to $0.45 and the first quarter EBITDA amounts to $85 million versus $0.38 and $86 million the year before.

On the next Slide, we are showing the revenue contribution for our fleet. More than 99% of our contracted cash comes from first-class charterers like MSC, Evergreen, Maersk, Cosco, Hamburg Sud and Hapag-Llyod. We have close to $2 billion in contracted revenues and the remaining time charter duration of about 3.5 years.

Slide 7, I think that Slide 7 speaks for itself. You can see the resilience of our business model. The bars are the revenues and the EBITDA since 2007 and the dotted line is a time charter index.

As you can see, in a cyclical industry and in a speculative market movements the company has been consistently performing based on its long-term contracted cash flows with first-class charterers.