Globus Maritime(GLBS) - 2024 Q2 - Quarterly Report

Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of Globus Maritime Limited's financial performance, operational results, and liquidity position for the reporting period Overview Globus Maritime Limited operates a global fleet of dry bulk motor vessels, with all management services handled by its wholly-owned subsidiary in Greece - The company's principal business involves the ownership and operation of a fleet of dry bulk motor vessels, providing worldwide transportation for dry cargo products[18] Fleet and Corporate Structure as of June 30, 2024 | Company | Vessel Owned | Status | | :--- | :--- | :--- | | Devocean Maritime Ltd. | m/v River Globe | Owned | | Artful Shipholding S.A. | m/v Moon Globe*** | Sold July 8, 2024 | | Serena Maritime Limited | m/v Galaxy Globe | Owned | | Talisman Maritime Limited | m/v Power Globe | Owned | | Argo Maritime Limited | m/v Diamond Globe | Owned | | Salaminia Maritime Limited | m/v Orion Globe | Owned | | Calypso Shipholding S.A. | m/v GLBS Hero | Owned | | Daxos Maritime Limited | Hull No: NE-442** | Newbuilding (Delivered Aug 20, 2024) | | Paralus Shipholding S.A. | Hull No: NE-443* | Newbuilding | | Olympia Shipholding S.A. | Hull No: S-K192* | Newbuilding | | Thalia Shipholding S.A. | Hull No: S-3012* | Newbuilding | Results of Operations This section details the company's revenue generation from time charters and its primary expense categories, including voyage, vessel operating, general and administrative, depreciation, and interest costs - The company generates revenue primarily from time charters, where the charterer pays for voyage expenses like port and bunker costs, while the company covers vessel operating expenses[20][24][25] - Vessel operating expenses consist of crew wages, insurance, repairs, maintenance, and other costs necessary for vessel operation[26] - Vessels are depreciated on a straight-line basis over an estimated useful life of 25 years, with the scrap rate increased from $440 per ton to $480 per ton in Q4 2023[28] Selected Financial and Operational Data The company reports a significant increase in total comprehensive income to $3.0 million and Adjusted EBITDA to $6.0 million for H1 2024, driven by a surge in the daily Time Charter Equivalent (TCE) rate Consolidated Statements of Comprehensive Income Data (in thousands of U.S. Dollars) | Metric | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :--- | :--- | :--- | | Total Revenues | 17,229 | 16,414 | | Operating income | 3,480 | 1,952 | | Total comprehensive income | 2,980 | 1,425 | | Basic & diluted income per share | 0.14 | 0.07 | | EBITDA | 8,455 | 7,150 | | Adjusted EBITDA | 5,974 | 2,248 | Consolidated Statement of Financial Position Data (in thousands of U.S. Dollars) | Metric | June 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Total assets | 256,315 | 231,401 | | Total equity | 178,950 | 175,970 | | Total debt & Financial liabilities | 72,305 | 52,259 | | Total liabilities | 77,365 | 55,431 | Key Operational Metrics | Metric | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :--- | :--- | :--- | | Fleet utilization | 99.1% | 98.5% | | Average number of vessels | 6.9 | 8.9 | | Daily time charter equivalent (TCE) rate | $13,246 | $8,518 | | Daily operating expenses | $5,082 | $5,522 | Recent Developments In 2024, Globus Maritime expanded its fleet with two new Ultramax vessels, secured $51 million in new financing, and divested an older vessel - Took delivery of newbuilding vessel "m/v GLBS Hero" in January 2024 for a total cost of approximately $37.5 million[46] - Took delivery of newbuilding vessel "m/v GLBS Might" in August 2024 for a total cost of approximately $35.3 million[47] - Secured new financing through a $28 million sale and leaseback for "GLBS MIGHT" and a $23 million loan facility collateralized by "m/v GLBS Hero"[48][49] - Agreed to sell the 2005-built "Moon Globe" for a gross price of $11.5 million, with the vessel delivered to new owners on July 8, 2024[50] H1 2024 vs H1 2023 Performance Analysis The company's comprehensive income more than doubled in H1 2024, driven by a 56% increase in TCE rates and reduced voyage expenses, despite higher administrative costs Change in Net Income (in thousands of U.S. Dollars) | Description | Amount | | :--- | :--- | | Net income H1 2023 | 1,425 | | Increase in Voyage revenues | 814 | | Decrease in Voyage expenses | 2,705 | | Decrease in Vessels operating expenses | 2,501 | | Increase in Total administrative expenses | (2,268) | | Decrease in Reversal of Impairment | (2,509) | | Increase in Interest expense and finance costs | (643) | | Net income H1 2024 | 2,980 | - Voyage revenues increased by 5% to $17.0 million, driven by a 56% increase in the daily TCE rate to $13,246, which offset the impact of operating a smaller average fleet (6.9 vessels vs. 8.9)[56] - Voyage expenses plummeted from $3.2 million to $0.5 million, primarily due to a significant reduction in ballast days (17 vs. 189) and consequently lower bunker expenses[57][59] - Total administrative expenses more than doubled to $4.4 million from $2.1 million, mainly due to an accrual of approximately $2.0 million for a $3 million bonus awarded to a consultant affiliated with the CEO[63] Liquidity and Capital Resources Globus maintained strong liquidity with $74.4 million in cash and a $76.0 million working capital surplus as of June 30, 2024, with operating activities generating $7.7 million in cash Cash and Working Capital (in millions of U.S. Dollars) | Metric | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and bank balances | $74.4 | $77.8 | | Working capital surplus | $76.0 | N/A | Statement of Cash Flow Data (in thousands of U.S. Dollars) | Activity | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | 7,727 | (4,224) | | Net cash from investing activities | (29,244) | 10,705 | | Net cash from financing activities | 18,080 | (6,080) | - The increase in cash from operations was mainly due to higher net income and a significant decrease in payments for deferred dry docking costs[72] Unaudited Interim Condensed Consolidated Financial Statements This section presents the company's unaudited interim condensed consolidated financial statements, including the statement of comprehensive income, financial position, changes in equity, and cash flows Consolidated Financial Statements This section presents the unaudited Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Changes in Equity, and Statement of Cash Flows for the six-month period ended June 30, 2024 Unaudited Interim Condensed Consolidated Statement of Comprehensive Income (in thousands of U.S. Dollars) | Metric | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :--- | :--- | :--- | | Total Revenues | 17,229 | 16,414 | | Operating income | 3,480 | 1,952 | | NET INCOME FOR THE PERIOD | 2,980 | 1,425 | | Basic and Diluted income per share | 0.14 | 0.07 | Condensed Consolidated Statement of Financial Position (in thousands of U.S. Dollars) | Metric | June 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Total non-current assets | 168,366 | 152,105 | | Total current assets | 87,949 | 79,296 | | TOTAL ASSETS | 256,315 | 231,401 | | Total equity | 178,950 | 175,970 | | Total non-current liabilities | 65,370 | 45,930 | | Total current liabilities | 11,995 | 9,501 | | TOTAL EQUITY AND LIABILITIES | 256,315 | 231,401 | Notes to the Financial Statements These notes provide detailed explanations for the financial statements, covering vessel transactions, debt, capital commitments, and post-reporting date events Note 5: Vessels, net and Advances for vessel acquisition This note details fleet changes, including $38.5 million in additions and the reclassification of the "Moon Globe" to "Assets held for sale" after an agreement to sell it for $11.5 million - Agreed to sell the 2005-built "Moon Globe" for a gross price of $11.5 million[111] - Following the sale agreement, the company recorded a reversal of impairment of $1,891 thousand and reclassified the vessel's carrying amount of $11,368 thousand to "Assets held for sale"[112] Note 8: Long-Term Debt and Finance Liabilities, net As of June 30, 2024, total long-term debt and finance liabilities reached $72.7 million, including a new $23 million loan and a $2.8 million sale and leaseback liability for "GLBS Might" Breakdown of Debt and Finance Liabilities as of June 30, 2024 (in thousands of U.S. Dollars) | Facility | Principal | Amortized Cost | | :--- | :--- | :--- | | (a) CIT Loan Facility | 46,925 | 46,719 | | (b) Marguerite Maritime S.A. Loan | 23,000 | 22,786 | | Total Long-term debt | 69,925 | 69,505 | | (c) Daxos Maritime Ltd (Sale-Leaseback) | 2,800 | 2,800 | | Total Financial liabilities | 2,800 | 2,800 | - Secured a new $23 million loan facility from Marguerite Maritime S.A. with interest at Term SOFR plus a 2.3% margin, collateralized by the m/v GLBS Hero[140] - Entered a $28 million sale and leaseback for the newbuilding "GLBS Might", accounted for as a financial liability due to the company's obligation to repurchase the vessel under IFRS 15[144] Note 10: Commitments The company has $10.1 million in future minimum revenues from time charters and substantial capital commitments of approximately $107.3 million for four newbuilding vessels, with deliveries through Q3 2026 Future Minimum Revenues (in thousands of U.S. Dollars) | Period | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Within one year | 10,076 | 8,060 | | Total | 10,076 | 8,060 | Contractual Payments for Newbuilding Vessels (in thousands of U.S. Dollars) | Period | Total Payments | | :--- | :--- | | July 1, 2024 to June 30, 2025 | 46,725 | | July 1, 2025 to June 30, 2026 | 11,280 | | July 1, 2026 to Nov 30, 2026 | 49,300 | | Total | 107,305 | Note 12: Events after the reporting date Post-reporting date events include the completion of the "Moon Globe" sale, delivery of "m/v GLBS Might" with associated financing drawdown, and a $1.5 million bonus payment to a consultant - The sale of the 2005-built "Moon Globe" for $11.5 million was completed, and the vessel was delivered to its new owners on July 8, 2024[162] - Took delivery of the newbuilding vessel "m/v GLBS Might" on August 20, 2024, and drew down the remaining $25.2 million of the $28 million sale and leaseback financing[163][164] - Paid a $1.5 million bonus to a consultant affiliated with the CEO on August 26, 2024, following the successful delivery of the "GLBS Might"[165]