Globus Maritime(GLBS) - 2022 Q2 - Quarterly Report

Introduction and Company Overview Globus Maritime Limited's overview covers its dry bulk vessel operations and management structure Forward-Looking Statements This section outlines the predictive nature and inherent risks of forward-looking statements, detailing factors that could cause actual results to differ - Forward-looking statements are predictive, depend on future events or conditions, and include words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'estimates,' 'projects,' 'forecasts,' 'may,' 'should,' and similar expressions[3] - Factors that might cause future results to differ include changes in governmental rules/regulations, economic and competitive conditions (e.g., market fluctuations in charter rates, charterers' abilities to perform), the length and number of off-hire periods, dependence on third-party managers, and other risks detailed in the Annual Report[5] Company Business and Structure Globus Maritime Limited operates dry bulk vessels for global cargo transportation, managed by its wholly-owned subsidiary - The principal business of Globus Maritime Limited is the ownership and operation of a fleet of dry bulk motor vessels, providing maritime services for the transportation of dry cargo products on a worldwide basis[6][70] - Vessel operations are managed by Globus Shipmanagement Corp., a wholly-owned Marshall Islands corporation, which provides commercial, technical, cash management, and accounting services[7][71] Wholly-Owned Subsidiaries and Vessels (as at March 31, 2022) | Company | Country of Incorporation | Vessel Delivery Date | Vessel Owned | | :-------------------------- | :------------------- | :------------------- | :------------------- | | Globus Shipmanagement Corp. | Marshall Islands | - | Management Co. | | Devocean Maritime Ltd. | Marshall Islands | December 18, 2007 | m/v River Globe | | Domina Maritime Ltd. | Marshall Islands | May 19, 2010 | m/v Sky Globe | | Dulac Maritime S.A. | Marshall Islands | May 25, 2010 | m/v Star Globe | | Artful Shipholding S.A. | Marshall Islands | June 22, 2011 | m/v Moon Globe | | Longevity Maritime Limited | Malta | September 15, 2011 | m/v Sun Globe | | Serena Maritime Limited | Marshall Islands | October 29, 2020 | m/v Galaxy Globe | | Talisman Maritime Limited | Marshall Islands | July 20, 2021 | m/v Power Globe | | Argo Maritime Limited | Marshall Islands | June 9, 2021 | m/v Diamond Globe | | Calypso Shipholding S.A. | Marshall Islands | - | - | | Daxos Maritime Limited | Marshall Islands | - | - | | Olympia Shipholding S.A. | Marshall Islands | - | - | | Paralus Shipholding S.A. | Marshall Islands | - | - | | Salaminia Maritime Limited | Marshall Islands | November 29, 2021 | m/v Orion Globe | Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Globus Maritime's financial condition and operational results, highlighting key performance drivers and liquidity Key Measures and Revenue Recognition This section details the company's revenue generation, IFRS 16 accounting, operating expenses, and interest rate swap management Revenues The company generates revenues from time charters, recognizing lease income under IFRS 16, with separate technical management service fees - The Company generates revenues from charterers through time charters, recognizing revenue on a straight-line basis over the charter period as lease income in accordance with IFRS 16[8] - The standalone transaction price for the technical management service component (non-lease) was approximately $4,445 thousand for Q1 2022 (vs. $3,141 thousand for Q1 2021), and the lease component was $13,906 thousand for Q1 2022 (vs. $2,026 thousand for Q1 2021)[10][119] Time Charters Time charters involve charterers paying voyage expenses and owners paying vessel operating expenses, with rates influenced by supply and demand - Under time charters, the charterer pays voyage expenses (port, canal charges, bunkers), while the vessel owner pays vessel operating expenses (crewing, insurance, repairs, maintenance, spares, consumable stores, tonnage taxes)[12] - Time charter rates are usually fixed but fluctuate seasonally and annually, influenced by changes in spot charter rates, which are driven by vessel supply and demand[12] Voyage Expenses Voyage expenses primarily include port, canal, and bunker costs specific to a charter, along with brokerage commissions - Voyage expenses primarily consist of port, canal, and bunker expenses unique to a particular charter, paid by charterers under time charter arrangements or by the Company under voyage charter arrangements, and also include brokerage commissions[13] Gain on Sale of Bunkers, Net Gain on sale of bunkers results from value differences between vessel redelivery and delivery to new charterers - A gain on sale of bunkers results from the difference in the value of bunkers paid by the Company upon vessel redelivery from a previous charterer and the value of bunkers sold when the vessel is delivered to a new charterer[14][85] Vessel Operating Expenses Vessel operating expenses, expensed as incurred, primarily cover crew wages, insurance, repairs, maintenance, and tonnage taxes - Vessel operating expenses, expensed as incurred, primarily include crew wages and related costs, insurance, repairs and maintenance, spares and consumable stores, and tonnage taxes[15] General and Administrative Expenses General and administrative expenses cover senior executive services and public company costs like reporting, legal, and board compensation - General and administrative expenses consist of senior executive officer services and costs associated with being a public company, including public reporting, legal, accounting, NASDAQ compliance, board compensation, and investor relations[16] Depreciation Vessels are depreciated straight-line over 25 years with an estimated residual value of $380 per lightweight ton - Vessels are depreciated on a straight-line basis over an estimated useful life of 25 years from delivery, with an estimated residual value of $380 per lightweight ton[17] Interest and Finance Costs Interest and finance costs on debt for fleet acquisition are typically based on three-month LIBOR and an applicable margin - Interest expense and financing costs are incurred on debt used to partially finance fleet acquisition, generally calculated based on the three-month LIBOR rate and an applicable margin[18] Interest Rate Swap The company uses interest rate swaps to manage interest rate risk, measured at fair value, with changes recognized in comprehensive income - The Company uses interest rate swap agreements to manage exposure to interest rate risk, measuring them at fair value using discounted cash flow techniques[19][129] - Changes in the fair value of interest rate swaps are classified under 'Gain/ (Loss) on derivative financial instruments' in the consolidated statement of comprehensive income/(loss)[22] - The fair value of interest rate swaps is classified as 'Fair value of derivative financial instruments' in the consolidated statement of financial position, as either current or non-current assets or liabilities[20][21] Selected Financial and Operational Data This section presents key consolidated financial and operational data for Q1 2022 and 2021, highlighting significant year-over-year changes Consolidated Statements of Comprehensive Income/(Loss) Data This section provides key figures from the consolidated statements of comprehensive income/(loss) for Q1 2022 and Q1 2021 Consolidated Statements of Comprehensive Income/(Loss) Data (Q1 2022 vs Q1 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | March 31, 2021 | Change (YoY) | | :------------------------------------ | :------------- | :------------- | :----------- | | Voyage revenues | 18,351 | 5,167 | +255.1% | | Management & consulting fee income | 90 | - | N/A | | Total Revenues | 18,441 | 5,167 | +256.9% | | Operating income | 11,466 | 103 | +11032.0% | | Total finance gains/(costs), net | 617 | (869) | N/A (swing to gain) | | Total income/(loss) for the period | 12,083 | (766) | N/A (swing to income) | | Basic & diluted income/(loss) per share | 0.59 | (0.11) | N/A (swing to income) | EBITDA and Adjusted EBITDA Reconciliation This section reconciles EBITDA and Adjusted EBITDA, non-IFRS measures used to assess financial performance and debt servicing ability EBITDA and Adjusted EBITDA (Q1 2022 vs Q1 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | March 31, 2021 | Change (YoY) | | :------------------------------------ | :------------- | :------------- | :----------- | | EBITDA (unaudited) | 14,822 | 1,366 | +985.0% | | Adjusted EBITDA (unaudited) | 13,821 | 1,306 | +958.3% | - EBITDA and Adjusted EBITDA are non-IFRS measures used to assess financial performance and a company's ability to service/incur indebtedness, but they have limitations as analytical tools and should not be considered in isolation[25][26][27][28][29] Balance Sheets Data This section presents key figures from the balance sheets as of March 31, 2022, and December 31, 2021 Balance Sheet Data (as at March 31, 2022 vs December 31, 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | December 31, 2021 | Change | | :------------------------------------ | :------------- | :---------------- | :----- | | Total non-current assets | 134,181 | 135,712 | (1,531) | | Cash and bank balances and bank deposits (including restricted cash) | 55,499 | 46,861 | +8,638 | | Other current assets | 5,850 | 3,079 | +2,771 | | Total current assets | 61,349 | 49,940 | +11,409 | | Total assets | 195,530 | 185,652 | +9,878 | | Total equity | 158,501 | 146,418 | +12,083 | | Total debt net of unamortized debt discount | 30,088 | 31,303 | (1,215) | | Other liabilities | 6,941 | 7,931 | (990) | | Total liabilities | 37,029 | 39,234 | (2,205) | Statements of Cash Flows Data This section provides key figures from the statements of cash flows for Q1 2022 and Q1 2021 Cash Flow Data (Q1 2022 vs Q1 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | March 31, 2021 | Change (YoY) | | :------------------------------------ | :------------- | :------------- | :----------- | | Net cash generated from operating activities | 10,327 | 436 | +2267.0% | | Net cash used in investing activities | (15) | (4,326) | +99.7% (decrease in use) | | Net cash (used in) / generated from financing activities | (2,248) | 36,239 | N/A (swing to use) | Operational Data and Daily Time Charter Equivalent (TCE) Rate This section presents key operational data and the Daily Time Charter Equivalent (TCE) rate for Q1 2022 and Q1 2021 Operational Data (Q1 2022 vs Q1 2021) | Metric | March 31, 2022 | March 31, 2021 | Change (YoY) | | :------------------------------------ | :------------- | :------------- | :----------- | | Ownership days | 810 | 540 | +50.0% | | Available days | 810 | 516 | +57.0% | | Operating days | 798 | 512 | +55.9% | | Fleet utilization | 98.5% | 99.2% | -0.7 pp | | Average number of vessels | 9.0 | 6.0 | +50.0% | | Daily time charter equivalent (TCE) rate | 23,643 | 9,857 | +140.0% | | Daily operating expenses | 5,377 | 5,698 | -5.6% | - The 140% increase in Daily TCE rate for Q1 2022 ($23,643) compared to Q1 2021 ($9,857) is attributed to better conditions throughout the bulk market and an expanded fleet of nine vessels (up from six)[47] Recent Developments Globus Maritime committed to acquiring three new fuel-efficient bulk carriers for $107.8 million and is preparing for LIBOR cessation by June 2023 Contract for New Building Vessels The company committed to acquiring three new fuel-efficient bulk carriers for $107.8 million, with deliveries scheduled for 2024 - On April 29, 2022, the Company signed a contract for one 64,000 dwt fuel-efficient bulk carrier from Nihon Shipyard Co. (Japan) for approximately $37.5 million, scheduled for delivery in the first half of 2024[36][132] - On May 13, 2022, the Company signed two contracts for two 64,000 dwt fuel-efficient bulk carriers from Nantong COSCO KHI Ship Engineering Co. (China) for approximately $70.3 million, with deliveries scheduled for Q3 and Q4 2024[37][133] - The total consideration for the three new vessels is approximately $107.8 million, to be financed with a combination of debt and equity. Initial installments totaling $21.2 million ($7.4 million and $13.8 million) were paid in May 2022[36][37][123][124][132][133] LIBOR Replacement LIBOR cessation by June 2023 requires transitioning loan agreements to alternative rates, posing risks to borrowing costs and financing - LIBOR will cease publication after June 30, 2023, requiring the Company to transition its existing loan agreements from U.S. Dollar LIBOR to an alternative reference rate (e.g., SOFR) prior to this date[38][110] - The discontinuation of LIBOR presents risks including volatility in applicable interest rates, potential increased borrowing costs for future financing, or unavailability/difficulty in attaining financing, which could adversely affect profitability, earnings, and cash flow[39] Impact of External Factors The company acknowledges ongoing disruptions from COVID-19 and the Russia-Ukraine conflict, posing significant business and financial risks Impact of COVID-19 The COVID-19 pandemic continues to disrupt the global economy and shipping, potentially affecting business and cargo movement - The COVID-19 pandemic continues to cause substantial disruptions in the global economy and shipping industry, leading to significant volatility in financial markets and potentially negative effects on the Company's business, financial performance, and cargo movement due to quarantine checks[40][41][78][79] - As of March 31, 2022, the Company evaluated the carrying amount of its vessels and concluded that no impairment should be recorded or previously recognized impairment should be reversed[42][80] Conflicts (Russia-Ukraine) The Russia-Ukraine conflict has disrupted supply chains and caused economic instability, potentially affecting business, with no direct operational impact - The Russia-Ukraine conflict has disrupted supply chains and caused global economic instability, potentially increasing costs and adversely affecting the Company's business, including its ability to secure charters and financing on attractive terms[43][77] - Currently, there is no direct effect on the Company's operations from the Russia-Ukraine conflict[43][77] Results of Operations: Three-month period ended March 31, 2022 compared to the three-month period ended March 31, 2021 The company reported a Q1 2022 comprehensive income of $12.1 million, a turnaround from a $0.8 million loss, driven by increased revenues Overall Performance The company achieved a total comprehensive income of $12.1 million in Q1 2022, a significant improvement from a $0.8 million loss in Q1 2021 Total Comprehensive Income/(Loss) (Q1 2022 vs Q1 2021) | Metric | March 31, 2022 | March 31, 2021 | | :------------------------------------ | :------------- | :------------- | | Total comprehensive income/(loss) | $12,083 | $(766) | | Basic & diluted income/(loss) per share | $0.59 | $(0.11) | Factors Contributing to Income Increase (Q1 2022 vs Q1 2021) | Factor | Impact ($000s) | | :------------------------------------ | :------------- | | Net loss and total comprehensive loss for the 3-month period of 2021 | (766) | | Increase in Voyage revenues | 13,184 | | Increase in management & consulting fee income | 90 | | Increase in Gain on sale of bunkers, net | 1,149 | | Decrease in Interest expense and finance costs | 541 | | Increase in Gain on derivative financial instruments | 967 | | Net income and total comprehensive income for the 3-month period of 2022 | 12,083 | Voyage Revenues Voyage revenues increased by 256% to $18.4 million in Q1 2022, driven by a 140% rise in Daily TCE rate and an expanded fleet - Voyage revenues increased by 256% to $18.4 million in Q1 2022, up from $5.2 million in Q1 2021[47] - This increase was mainly attributed to a 140% rise in the Daily Time Charter Equivalent (TCE) rate ($23,643 in Q1 2022 vs. $9,857 in Q1 2021) and an expanded fleet of nine vessels (up from six)[47] Management & Consulting Fee Income The Company recognized $90 thousand in management & consulting fee income in Q1 2022 from a consultancy agreement with a related party - The Company recognized $90 thousand in management & consulting fee income in Q1 2022, stemming from a consultancy agreement with Eolos Shipmanagement S.A. (a related party) entered into on July 15, 2021, for a daily fee of $1,000[48] Voyage Expenses Voyage expenses increased to $0.3 million in Q1 2022 from $0.1 million in Q1 2021, due to higher commissions and other expenses Voyage Expenses (Q1 2022 vs Q1 2021) | In $000's | 2022 | 2021 | | :---------------- | :--- | :--- | | Commissions | 288 | 72 | | Other voyage expenses | 61 | 6 | | Total | 349 | 78 | - Voyage expenses increased to $0.3 million in Q1 2022 from $0.1 million in Q1 2021, primarily due to higher commissions and other voyage expenses[49] Gain on Sale of Bunkers, Net A gain of approximately $1.1 million from bunkers was recognized in Q1 2022, with no such gain in Q1 2021 - A gain of approximately $1.1 million from bunkers was recognized in Q1 2022, resulting mainly from the difference in bunker values between vessel redelivery from a previous charterer and delivery to a new charterer; no such gain was recognized in Q1 2021[50] Vessel Operating Expenses Vessel operating expenses increased to $4.4 million in Q1 2022 due to fleet expansion, despite a 6% decrease in average daily expenses - Vessel operating expenses increased to $4.4 million in Q1 2022 from $3.1 million in Q1 2021, mainly due to the fleet expansion from six to nine vessels[51] - Average daily operating expenses decreased by 6% to $5,377 per vessel per day in Q1 2022 (from $5,698 in Q1 2021)[52] Vessel Operating Expenses Breakdown (Q1 2022 vs Q1 2021) | Category | 2022 | 2021 | | :--------------- | :--- | :--- | | Crew expenses | 49% | 52% | | Repairs and spares | 22% | 24% | | Insurance | 8% | 7% | | Stores | 13% | 11% | | Lubricants | 5% | 3% | | Other | 3% | 3% | Depreciation Depreciation charges increased to $1.4 million in Q1 2022 due to fleet expansion, partly offset by a higher scrap rate - Depreciation charges increased to $1.4 million in Q1 2022 from $0.7 million in Q1 2021, primarily due to the fleet expansion from six to nine vessels[53] - This increase was partly counterbalanced by an increase in the scrap rate in the Company's books from $300/ton to $380/ton during Q4 2021[53] Total Administrative Expenses Total administrative expenses increased to $1.1 million in Q1 2022 from $0.7 million in Q1 2021, partly due to new personnel - Total administrative expenses increased to $1.1 million in Q1 2022 from $0.7 million in Q1 2021, partly attributed to new personnel hirings resulting from the fleet expansion[54] Interest Expense and Finance Costs Interest expense and finance costs decreased to $0.4 million in Q1 2022 from $0.9 million in Q1 2021, due to a reduced weighted interest rate - Interest expense and finance costs decreased to $0.4 million in Q1 2022 from $0.9 million in Q1 2021[55] - This decrease is mainly attributed to a reduction in the weighted interest rate from 8.76% in Q1 2021 to 4.02% in Q1 2022, following the refinancing of the EnTrust loan facility with the CIT loan facility in May 2021[56] Interest Expense and Finance Costs Breakdown (Q1 2022 vs Q1 2021) | In $000's | 2022 | 2021 | | :-------------------------------- | :--- | :--- | | Interest payable on long-term borrowings | 312 | 810 | | Bank charges | 23 | 22 | | Operating lease liability interest | 16 | 10 | | Amortization of debt discount | 35 | 77 | | Other finance expenses | 3 | 11 | | Total | 389 | 930 | Gain on Derivative Financial Instruments A gain of approximately $967 thousand from derivative financial instruments was recognized in Q1 2022 from an Interest Rate Swap - The Company recognized a gain of approximately $967 thousand from derivative financial instruments in Q1 2022, net of interest, resulting from an Interest Rate Swap agreement entered into on May 10, 2021, following the new loan facility with CIT Bank N.A[57] Liquidity and Capital Resources As of March 31, 2022, the company maintained strong liquidity with a $50.1 million working capital surplus and improved operating cash flow - As of March 31, 2022, cash and bank balances and bank deposits (including restricted cash) were $55.5 million, an increase from $46.9 million at December 31, 2021[58][31] - The Company reported a working capital surplus of $50.1 million as of March 31, 2022, and was in compliance with the covenants in its loan agreement with CIT, indicating its ability to operate as a going concern[58][59][75][76] - Net cash generated from operating activities increased significantly to $10.3 million in Q1 2022, compared to $0.4 million in Q1 2021, mainly due to the increase in Voyage revenues[60][32] - Net cash used in investing activities decreased substantially to $15 thousand in Q1 2022, compared to $4.3 million in Q1 2021, primarily due to lower advances for vessel purchases[61][32] Net Cash Flows from Financing Activities (Q1 2022 vs Q1 2021) | In $000's | March 31, 2022 | March 31, 2021 | | :------------------------------------ | :------------- | :------------- | | Proceeds from issuance of share capital | - | 42,999 | | Proceeds from issuance of warrants | - | 15 | | Transaction costs on issue of new common shares | - | (272) | | Repayment of long-term debt | (1,250) | (1,493) | | Prepayment of long-term debt | - | (4,477) | | (Increase)/decrease in restricted cash | (541) | 360 | | Repayment of lease liability | (75) | (80) | | Interest paid | (382) | (813) | | Net cash (used in)/generated from financing activities | (2,248) | 36,239 | Unaudited Interim Condensed Consolidated Financial Statements This section presents the unaudited interim condensed consolidated financial statements, including income, balance sheet, equity, and cash flow Unaudited Interim Condensed Consolidated Statements of Comprehensive Income/(Loss) The statement shows a total comprehensive income of $12.1 million for Q1 2022, a significant improvement from a $0.8 million loss in Q1 2021 Key Income Statement Figures (Q1 2022 vs Q1 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | March 31, 2021 | | :------------------------------------ | :------------- | :------------- | | Voyage revenues | 18,351 | 5,167 | | Management & consulting fee income | 90 | - | | Total Revenues | 18,441 | 5,167 | | Operating income | 11,466 | 103 | | Total income/(loss) for the period | 12,083 | (766) | | Basic and Diluted income/(loss) per share | 0.59 | (0.11) | Condensed Consolidated Statements of Financial Position The balance sheet as of March 31, 2022, shows total assets of $195.5 million, with equity rising and liabilities decreasing Key Balance Sheet Figures (as at March 31, 2022 vs December 31, 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | December 31, 2021 | | :------------------------------------ | :------------- | :---------------- | | Vessels, net | 128,610 | 130,724 | | Total non-current assets | 134,181 | 135,712 | | Cash and cash equivalents | 53,277 | 45,213 | | Total current assets | 61,349 | 49,940 | | TOTAL ASSETS | 195,530 | 185,652 | | Total equity | 158,501 | 146,418 | | Long-term borrowings, net of current portion | 25,218 | 26,438 | | Total non-current liabilities | 25,806 | 27,108 | | Current portion of long-term borrowings | 4,870 | 4,865 | | Total current liabilities | 11,223 | 12,126 | | TOTAL LIABILITIES | 37,029 | 39,234 | | TOTAL EQUITY AND LIABILITIES | 195,530 | 185,652 | Unaudited Interim Condensed Consolidated Statements of Changes in Equity Total equity increased to $158.5 million as of March 31, 2022, primarily due to comprehensive income Changes in Equity (Q1 2022 vs Q1 2021) | Metric (in thousands of U.S. Dollars) | As at March 31, 2022 | As at January 1, 2022 | As at March 31, 2021 | As at January 1, 2021 | | :------------------------------------ | :------------------- | :-------------------- | :------------------- | :-------------------- | | Issued share capital | 82 | 82 | 42 | 12 | | Share premium | 284,406 | 284,406 | 237,954 | 195,102 | | Accumulated deficit | (125,987) | (138,070) | (153,786) | (153,020) | | Total Equity | 158,501 | 146,418 | 84,210 | 42,094 | | Total comprehensive income/(loss) for the period | 12,083 | - | (766) | - | | Issuance of new common shares (2021) | - | - | 42,999 | - | | Issuance of new common shares due to exercise of Warrants (2021) | - | - | 15 | - | | Transaction costs on issue of new common shares (2021) | - | - | (272) | - | | Share-based payments (2021) | - | - | 10 | - | Unaudited Interim Condensed Consolidated Statements of Cash Flows Net cash generated from operating activities was $10.3 million in Q1 2022, with minimal investing cash use and financing activities shifting to cash usage Key Cash Flow Figures (Q1 2022 vs Q1 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | March 31, 2021 | | :------------------------------------ | :------------- | :------------- | | Income/(Loss) for the period | 12,083 | (766) | | Net cash generated from operating activities | 10,327 | 436 | | Net cash used in investing activities | (15) | (4,326) | | Net cash (used in)/generated from financing activities | (2,248) | 36,239 | | Net increase in cash and cash equivalents | 8,064 | 32,349 | | Cash and cash equivalents at the beginning of the period | 45,213 | 19,037 | | Cash and cash equivalents at the end of the period | 53,277 | 51,386 | Notes to the Unaudited Interim Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited interim condensed consolidated financial statements, covering accounting policies, debt, and commitments Basis of Presentation and General Information The interim condensed consolidated financial statements, prepared under IAS 34, reflect a working capital surplus and debt covenant compliance - The unaudited interim condensed consolidated financial statements are prepared in accordance with IAS 34 Interim Financial Reporting[72] - As of March 31, 2022, the Company reported a working capital surplus of $50.1 million and was in compliance with its debt covenants, indicating its ability to operate as a going concern[75][76] Significant Accounting Policies and Recent Accounting Pronouncements No significant changes to accounting policies occurred in Q1 2022, with adopted IFRS amendments having no financial statement impact - No significant changes to the Company's accounting policies occurred in Q1 2022, other than the adoption of IFRS 3, IAS 16, IAS 37 amendments, and Annual Improvements 2018-2020, none of which impacted the financial statements[81][82][87] - The IFRS 16 amendment for COVID-19 Related Rent Concessions (extending the practical expedient to June 30, 2022) also had no impact on the Company's financial statements[83][84] Cash and Cash Equivalents and Restricted Cash As of March 31, 2022, cash and cash equivalents totaled $53.3 million, with $5.8 million in restricted cash pledged for collateral Cash and Cash Equivalents (as at March 31, 2022 vs December 31, 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 | December 31, 2021 | | :------------------------------------ | :------------- | :---------------- | | Cash on hand | 17 | 25 | | Cash at banks | 53,260 | 45,188 | | Total | 53,277 | 45,213 | - As of March 31, 2022, the Company had pledged $5,766 thousand in restricted cash to fulfill collateral requirements, with $3,544 thousand classified as non-current and $2,222 thousand as current assets[89] Transactions with Related Parties Related party transaction details remained unchanged in Q1 2022, except for non-executive director compensation, totaling $80 thousand per director - Details of the Company's transactions with related parties did not change in Q1 2022, as discussed in the 2021 Annual Report[90] - In 2022, the Company changed the compensation of non-executive directors, with the annual service fee for each director totaling $80 thousand[91] Vessels, Net The net book value of vessels decreased slightly to $128.6 million as of March 31, 2022, reflecting depreciation and amortization Vessels, Net (in thousands of U.S. Dollars) | Metric | Balance at January 1, 2022 | Additions | Depreciation & Amortization | Balance at March 31, 2022 | | :------------------------------------ | :------------------------- | :-------- | :-------------------------- | :------------------------ | | Vessels cost | 233,738 | 19 | - | 233,757 | | Vessels depreciation | (107,776) | - | (1,309) | (109,085) | | Dry docking costs | 15,927 | 127 | - | 16,054 | | Depreciation of dry-docking costs | (11,165) | - | (951) | (12,116) | | Net Book Value | 130,724 | 146 | (2,260) | 128,610 | - No impairment or reversal of impairment was recognized for vessels for both Q1 2022 and Q1 2021[92] Share Capital and Share Premium As of March 31, 2022, authorized share capital remained at $2.2 million, with 20.6 million common shares and 19.7 million warrants outstanding Authorized Share Capital (as at March 31, 2022 vs December 31, 2021) | Category | March 31, 2022 | December 31, 2021 | | :------------------------------------ | :------------- | :---------------- | | 500,000,000 Common Shares of par value $0.004 each | 2,000 | 2,000 | | 100,000,000 Class B common shares of par value $0.001 each | 100 | 100 | | 100,000,000 Preferred shares of par value $0.001 each | 100 | 100 | | Total authorised share capital | 2,200 | 2,200 | - As of March 31, 2022, 20,582,301 common shares were issued and fully paid, and Globus' share premium amounted to $284,406 thousand[94][97] - The Company had a total of 19,701,120 warrants outstanding as of March 31, 2022, to purchase an aggregate of 19,701,120 common shares, with no exercises during the period[98][99][100][101] Earnings/(Loss) per Share Basic and diluted income per share for Q1 2022 was $0.59, a significant improvement from a $0.11 loss per share in Q1 2021 Net Income/(Loss) per Common Share (Q1 2022 vs Q1 2021) | Metric | March 31, 2022 | March 31, 2021 | | :------------------------------------ | :------------- | :------------- | | Income/(Loss) attributable to common equity holders | 12,083 | (766) | | Weighted average number of shares – basic and diluted | 20,582,301 | 7,209,657 | | Net income/(loss) per common share – basic and diluted | $0.59 | $(0.11) | - Warrants were out-of-the-money during Q1 2022 and anti-dilutive during Q1 2021, and thus were not included in the computation of diluted EPS[104][105] Long-Term Debt, Net As of March 31, 2022, total long-term debt was $30.5 million, primarily from the CIT loan facility, with the company in compliance Long-Term Debt, Net (in thousands of U.S. Dollars) | Metric | March 31, 2022 | December 31, 2021 | | :------------------------------------ | :------------- | :---------------- | | Loan Balance (Gross) | 30,500 | 31,750 | | Unamortized Debt Discount | (412) | (447) | | Total Borrowings (Net) | 30,088 | 31,303 | | Less: Current Portion (Net) | (4,870) | (4,865) | | Long-Term Portion (Net) | 25,218 | 26,438 | - In May 2021, the Company entered a new term loan facility for up to $34,250 thousand with CIT Bank N.A. to refinance existing indebtedness, bearing interest at LIBOR plus a margin of 3.75% for three-month interest periods[110] - As of March 31, 2022, the Company was in compliance with the loan covenants of the CIT loan facility, including maintaining consolidated cash of not less than $150 thousand for each group vessel[109][111][113] Contractual Annual Loan Principal Payments to CIT Bank N.A. (subsequent to March 31, 2022) | March 31, | CIT Bank N.A. ($000s) | | :-------- | :-------------------- | | 2023 | 5,000 | | 2024 | 5,000 | | 2025 | 5,000 | | 2026 | 15,500 | | Total | 30,500 | Share Based Payment No share-based payments were made in Q1 2022 due to a change in non-executive director compensation to cash - There were no share-based payments for the period from January 1 to March 31, 2022, as the Company changed the compensation of non-executive directors[115] - For the period from January 1 to March 31, 2021, non-executive director payments included 1,946 common shares, totaling $10 thousand[115] Contingencies Management is not aware of any material claims, suits, complaints, or contingent liabilities from ordinary shipping business - Management is not aware of any material claims, suits, complaints, or contingent liabilities arising in the ordinary course of the shipping business[116] Commitments As of March 31, 2022, the company had $10.7 million in future lease revenues and committed $107.8 million for three new vessels Future Net Minimum Lease Revenues Receivable (in thousands of U.S. Dollars) | Period | March 31, 2022 | December 31, 2021 | | :--------------- | :------------- | :---------------- | | Within one year | 10,680 | 6,082 | | Total | 10,680 | 6,082 | - On April 29, 2022, the Company assumed a commitment of approximately $37.5 million for the construction of one new bulk carrier, and on May 13, 2022, committed approximately $70.3 million for two additional new bulk carriers, totaling approximately $107.8 million for three vessels[123][124] - In May 2022, the Company paid initial installments of $7.4 million for the first vessel and $13.8 million for the two additional vessels[123][124] Fair Values The company measures derivative financial instruments and long-term borrowings at fair value using Level 2 inputs, with no transfers between hierarchy levels Fair Value of Financial Instruments (as at March 31, 2022 vs December 31, 2021) | Metric (in thousands of U.S. Dollars) | March 31, 2022 (Carrying Amount) | March 31, 2022 (Fair Value - Level 2) | December 31, 2021 (Carrying Amount) | December 31, 2021 (Fair Value - Level 2) | | :------------------------------------ | :------------------------------- | :------------------------------------ | :---------------------------------- | :--------------------------------------- | | Derivative financial instruments (non-current asset) | 1,126 | 1,126 | 417 | 417 | | Current portion of fair value of derivative financial instruments (asset) | 208 | 208 | - | - | | Current portion of fair value of derivative financial instruments (liability) | - | - | 92 | 92 | | Long-term borrowings | 30,500 | 30,899 | 31,750 | 32,155 | - Valuation techniques for derivative financial instruments (Interest Rate Swap) and long-term borrowings use discounted cash flow with a discount rate as the significant unobservable input (Level 2)[129][130] - There have been no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the period[131] Events After the Reporting Date After March 31, 2022, the company committed to constructing three new fuel-efficient bulk carriers for $107.8 million, with initial installments paid - On April 29, 2022, the Company entered a contract for the construction and purchase of one 64,000 dwt fuel-efficient bulk carrier for approximately $37.5 million, with delivery scheduled for the first half of 2024[132] - On May 13, 2022, the Company signed two contracts for the construction and purchase of two 64,000 dwt fuel-efficient bulk carriers for approximately $70.3 million, with deliveries scheduled for Q3 and Q4 2024[133] - In May 2022, the Company paid initial installments of $7.4 million for the first vessel and $13.8 million for the two additional vessels[132][133]