28-07-2021 Costamare keeps options open for further push into bulkers, By Harry Papachristou, TradeWinds
Costamare is sitting on ample liquidity that could allow it to expand further, not just in bulkers but in its core business of containerships as well, company management said on Wednesday. In an earnings release earlier in the day, the company unveiled having purchased 37 bulkers in total over the past few months as it re-entered the segment after nearly three decades. “We have bought those ships recently because we believe that the economics make sense,” company chief financial officer Gregory Zikos told analysts in a conference call.
“We are flexible, we can be efficient in executing, we have equity, and we also have access to commercial bank debt — having all those ingredients in place, it’s just a question of what we feel is a better use for our capital.” Costis Constantakopoulos-led Costamare earlier on Wednesday announced it has lined up “hunting license” bank facilities of over $245m in total, most of which remains available. On top of that, the company is sitting on contracted revenue of $3.3bn over a period of four years because of a booming market for the 79 containerships it has on the water. That amount provides “a buffer and downside protection”, while Costamare opportunistically enhances equity returns with the help of the dry bulk fleet, Zikos explained.
In a presentation of results accompanying the conference call, Costamare acknowledged dry bulk asset values have increased significantly over the past year. In the same breath, however, the company pointed out that secondhand price growth continues lagging the increase in freight rates such ships are fetching on the chartering market. Bulker fleet growth will be subdued for at least two years, Costamare said in its presentation. The orderbook in handysizes, which account for 16 of the 37 ships Costamare has acquired so far, remains below 3% of the active fleet, the company added.
Zikos did not even exclude possible further expansion in containerships, where Costamare has already acquired more than a dozen of vessels since late last year before slowing down again when values of such ships went through the roof. Zikos refused to be drawn into any discussion of specific growth targets for the company. “If you have a predetermined target … at some point you won’t be looking at [individual] transaction economics but just at ways to meet your targets,” he explained while fielding analysts’ questions. “As long as we can be flexible and opportunistic, we will continue in the same way,” Zikos said.