Costamare(CMRE) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income rose by approximately 80% in Q4 2019 compared to the previous year, with adjusted EPS at $0.22 [4] - For the full year, net income was close to $100 million, marking a 47% increase compared to 2018, with adjusted EPS for 2019 at $0.91 [4] Business Line Data and Key Metrics Changes - The company sold four small-sized containerships with an average age of 27 years and replaced them with four large-sized Panamax vessels with an average age of 11 years [5] - The company achieved utilization rates close to 100% and maintained competitive operating expenses [6] Market Data and Key Metrics Changes - The idle fleet adjusted for vessels undergoing scrubber retrofits stands at a low 1.5%, while the order book remains close to 10% [7] - Charter rates for larger ships have been rising faster during 2019 compared to those of smaller vessels [11] Company Strategy and Development Direction - The company is focused on fleet renewal, acquiring newer vessels while disposing of older ones to enhance operational efficiency [3][5] - The company is actively looking for new transactions in the current market environment, indicating a proactive approach to capitalizing on market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market momentum, especially with 18 Post-Panamax ships coming off charter over the next 12 months [3] - The company is in constant discussions with liners regarding scrubber installations, indicating a strong interest from customers [19] Other Important Information - The company maintains a strong balance sheet with approximately 41% leverage and no balance sheet financing [6] - The company has $2.2 billion in contracted revenues with a remaining time-chartered duration of about 3.5 years [10] Q&A Session Summary Question: Plans for vessels coming off contracts - Management is considering longer-term contracts (3-5 years) for vessels coming off contracts, depending on market conditions and counterparty risk [14] Question: Acquisition details of Panamax vessels - The exact acquisition price was not disclosed, but the market for the acquired vessels is estimated between $13,500 to $14,000 per day [17] Question: Customer demand for scrubbers - There is significant interest from liner companies regarding scrubber installations, with agreements already in place for 15 vessels [19] Question: Financing details for new ships - The refinancing of four ships was achieved through bilateral deals, with leverage below 70% based on valuations [25] Question: Scrubber installation capacity - There have been delays in scrubber retrofits, but no specific capacity reduction has been observed due to the Chinese New Year [30]