Share Capital and Financing - As of December 31, 2022, the company had 20,582,301 common shares and 10,300 Series Preferred Shares outstanding[453]. - The company entered into a credit facility for up to $15 million with Firment Shipping Inc., which was fully repaid on July 27, 2020[438][440]. - In June 2020, the company completed a public offering of 342,857 units at $35 per unit, including common shares and Class A Warrants[441]. - The company issued 1,256,765 common shares and warrants to purchase 1,270,587 common shares on December 9, 2020, with the exercise price reduced from $8.50 to $6.25[445]. - In May 2021, the company secured a loan facility of $34.25 million from First Citizens Bank & Trust Company, bearing interest at LIBOR plus a margin of 3.75%[461]. - The CIT Loan Facility was increased from $34.25 million to $52.25 million in August 2022, secured by a first preferred mortgage over the vessel Orion Globe[462]. - The outstanding amount under the Firment Shipping Credit Facility was $14.2 million as of December 31, 2020[441]. - The company has not exercised any of the June PP Warrants, July PP Warrants, December 2020 Warrants, January 2021 Warrants, February 2021 Warrants, or June 2021 Warrants as of the date of the report[451]. - As of December 31, 2022, the company had $44.4 million in outstanding indebtedness under credit arrangements, an increase from $31.8 million in 2021, indicating a rise in financial leverage[523]. - The mandatory debt repayments for 2023 under the CIT Loan Facility are $6.5 million, with $1.6 million already paid[555]. - The company had an aggregate debt outstanding of $44.4 million under the CIT Loan Facility as of December 31, 2022, an increase from $31.75 million in 2021[568]. - The CIT Loan Facility contains covenants requiring a minimum loan to value ratio of 75% for the first 18 months and a maximum leverage ratio of 0.75:1.00[556]. - As of December 31, 2022, Globus Maritime Limited was in compliance with the covenants of the CIT Loan Facility[587]. - The company may seek additional capital through equity or debt offerings, selling vessels, or refinancing to improve its debt structure[557]. Fleet and Operations - The average number of vessels in the fleet increased from 5.2 in 2020 to 7.1 in 2021, and further to 9.0 in 2022, indicating a growth in fleet size[469]. - The company plans to grow its fleet through selective acquisitions or construction of new vessels, aiming for attractive returns on equity and accretive earnings[466]. - In 2022, the average fleet size increased from 7.1 vessels in 2021 to 9.0 vessels, contributing to higher voyage revenues compared to 2021[496]. - Total operating days for 2022 were 3,029 with a fleet utilization rate of 98.5%, compared to 2,477 operating days and 97.9% utilization in 2021[537]. - The company aims to manage its fleet to maintain profitability across the shipping cycle, adjusting charter contracts based on market conditions to maximize returns for shareholders[468]. Revenue and Expenses - For the year ended December 31, 2022, the company reported operating income of $23.6 million, an increase from $17.9 million in 2021[536]. - Voyage revenues increased by $18.2 million, or 42%, to $61.4 million in 2022, driven by an increase in the average number of vessels from 7.1 in 2021 to 9 in 2022 and an increase in TCE from $16,627 to $18,227[537]. - Voyage expenses rose by $4.3 million, or 391%, to $5.4 million in 2022, attributed to longer travel periods and increased dry-docking repairs[538]. - Vessel operating expenses increased by $4.2 million, or 30%, to $18 million in 2022, with daily operating expenses rising to $5,483 from $5,325 in 2021[539]. - Depreciation charges increased to $5.6 million in 2022 from $3.9 million in 2021, primarily due to fleet expansion[540]. - Depreciation of dry-docking costs rose by $1.8 million, or 64%, to $4.6 million in 2022, reflecting the increase in fleet size and dry-docking activities[541]. - Interest expense and finance costs decreased by $1 million, or 30%, to $2.3 million in 2022, with total borrowings outstanding increasing to $44.38 million from $31.75 million[545]. - Administrative expenses increased by $0.3 million, or 11%, to $2.9 million in 2022, mainly due to higher Greek taxes[542]. Market Conditions - Dry bulk shipping rates are significantly influenced by global economic activity, particularly in China, which is the largest importer of dry bulk commodities[473]. - Spot rates for Kamsarmax, Panamax, and Supramax vessels reached levels not seen since 2010 in 2021, with high rates continuing into the first half of 2022 before starting to decline[474]. - The conflict between Russia and Ukraine has caused significant volatility in the global economy, potentially increasing costs and affecting the company's ability to secure charters and financing[480]. - The Baltic Dry Index (BDI) registered a high of 3,369 and a low of 965 in 2022, reflecting significant volatility in the dry bulk market[600]. - The global dry cargo fleet deadweight carrying capacity is forecasted to grow by 2.7% in 2023, while demand is expected to grow by 1.5-2.5%[601]. - The dry bulk orderbook stands at 69 million dwt, representing 7.1% of the world's total dry bulk fleet, with significant deliveries scheduled for 2023 and 2024[606]. Regulatory and Compliance - The company has not installed scrubbers on its vessels and will continue to evaluate options to comply with IMO 2020 regulations, which mandate a reduction in sulfur emissions[483]. - The company must maintain a minimum liquidity of $500,000 for each mortgaged ship and a cash amount of not less than $150,000 for each unencumbered ship[84]. - The company has a maximum leverage ratio of 0.75:1.00 and must maintain a debt service coverage ratio of at least 1.15:1.00 after any dividend payments[84]. Cash Flow and Investments - Net cash generated from operating activities in 2022 was $26.9 million, up from $20.8 million in 2021, primarily due to an increase in the average number of vessels and TCE rates[563]. - Net cash used in investing activities was $29 million in 2022, mainly for advances paid for three newbuildings, compared to $72 million in 2021 for vessel purchases[564]. - The company generated $9.7 million from financing activities in 2022, including $18 million from a new deed of accession to the CIT loan facility[565]. - As of December 31, 2022, working capital amounted to approximately $45 million, an increase from $37.8 million in 2021[560]. - The company incurs additional capital expenditures for vessel surveys, which may reduce operating days and increase cash flow needs[598]. - The company has capital expenditures planned for the construction of new vessels, including a $37.5 million bulk carrier scheduled for delivery in the first half of 2024[594]. - The company signed contracts for two additional fuel-efficient bulk carriers with a total consideration of approximately $70.3 million, with deliveries expected in late 2024[595]. Risk Management - The company has charter agreements that expose it to counterparty risk, which could lead to significant losses if charterers fail to meet their obligations[500]. - The company has a low-risk approach to treasury management, investing cash balances in term deposit accounts to align with liquidity requirements[589].
Globus Maritime(GLBS) - 2022 Q4 - Annual Report