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Costamare Inc. Reports Results for the Third Quarter and the Nine-Month Period Ended September 30, 2021

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MONACO, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the third quarter (“Q3 2021”) and nine-months ended September 30, 2021.

I. PROFITABILITY

  • Q3 2021 Net Income available to common stockholders of $107.4 million compared to $17.4 million in Q3 2020.

  • Q3 2021 Earnings per Share of $0.87 compared to $0.14 in Q3 2020.

  • Q3 2021 Adjusted Net Income available to common stockholders(1) of $81.5 million compared to $26.7 million in Q3 2020.

  • Q3 2021 Adjusted Earnings per Share(1) of $0.66 compared to $0.22 in Q3 2020.

II. SALE AND PURCHASE ACTIVITY

  • Delivery of another 20 dry bulk vessels (total delivered fleet of 34 vessels), with three additional vessels expected to be delivered within 2021.

  • Delivery of the 2009-built, 4,578 TEU containership Gialova (ex. Cosco Fukuyama) which commenced its time charter with ZIM for a period of 32 to 36 months.

  • Vessel disposals:

    • Sale of the 2003-built, 5,928 TEU containership Venetiko (capital gain of $16.5 million in Q3 2021).

    • Sale of the 2002-built, 4,992 TEU containership ZIM Shanghai (estimated capital gain of approximately $13.8 million in the next quarter).

    • Sale of the 2001-built, 5,576 TEU containership Ensenada (co-owned with York Capital). This sale resulted in a capital gain for the Company of $5.7 million in Q3 2021.

    • Agreed to sell the 2002-built, 4,992 TEU containership ZIM New York. Sale is expected to be concluded in 2021.

III. NEW CHARTER ARRANGEMENTS

  • 5 new containership fixtures since last quarter including:

    • the forward fixture of the 2006-built, 5,642 TEU vessel Glen Canyon for a period of 39 to 42 months at a daily rate of $62,500, with estimated delivery to the new charterer between the first and second quarters of 2022.

  • 18 new dry bulk vessel charters.

IV. NEW DEBT FINANCING AND CAPITAL STRUCTURE

  • New agreement for the financing of future dry bulk vessel acquisitions in the form of a hunting license facility for an aggregate amount of $150 million with a European financial institution.

  • Liquidity of $303.1 million as of the end of Q3 2021 (including our share of cash amounting to $4.7 million held in companies co-owned with York Capital), which coupled with the $254.7 million of undrawn funds from our three hunting license facilities, amounts to $557.8 million.

(1) Adjusted Net Income available to common stockholders and respective per share figures are non-GAAP measures and should not be used in isolation or as substitutes for Costamare’s financial results presented in accordance with U.S. generally accepted accounting principles (“GAAP”). For the definition and reconciliation of these measures to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to Exhibit I.

NEW BUSINESS DEVELOPMENTS

A. New charter agreements(2)

  • The Company has chartered in total 5 containerships since last quarter. Below is an illustrative list of some of the latest fixtures:

    • Charter of the 2006-built, 5,642 TEU containership Glen Canyon with ZIM for a period of 39 to 42 months at charterers’ option, which will commence during the period from February 10, 2022 to April 10, 2022, at a daily rate of $62,500.

    • Extend the charter of the 2004-built, 2,586 TEU containership Lakonia with COSCO for a period of 35 to 36 months at charterers’ option starting from April 24, 2022, at a daily rate of $26,500. Current daily rate is $17,300.

    • Extend the charter of the 2000-built, 2,474 TEU containership Areopolis with COSCO for a period of 35 to 36 months at charterers’ option starting from May 3, 2022, at a daily rate of $26,500. Current daily rate is $17,300.

  • The Company has chartered in total 18 dry bulk vessels since last quarter. Below is an illustrative list of some of the latest fixtures:

    • Charter of the 2012-built, 37,019 dwt dry bulk vessel Discovery for a period expiring in November 2021, at a daily rate of $47,000.

    • Charter of the 2008-built, 56,557 dwt dry bulk vessel Clara for a period expiring in November 2021, at a daily rate of $47,000.

    • Charter of the 2011-built, 57,937 dwt dry bulk vessel Curacao for a period expiring in December 2021, at a daily rate of $39,000.

    • Charter of the 2012 built, 83,478 dwt dry bulk vessel Aeolian for a period expiring in December 2021, at a daily rate of $39,000.

    • Charter of the 2012-built, 56,670 dwt dry bulk vessel Merida for a period expiring in November 2021, at a daily rate of $42,000.

    • Charter of the 2016-built, 63,553 dwt dry bulk vessel Seabird for a period expiring in November 2021, at a daily rate of $40,750.

    • Charter of the 2010-built, 34,426 dwt dry bulk vessel Manzanillo for a period expiring in November 2021, at a daily rate of $48,750.

    • Charter of the 2012-built, 81,541 dwt dry bulk vessel Farmer for a period expiring in December 2021, at a daily rate of $38,300.

(2) Please refer to Fleet List tables for additional information on vessels employment details.


B. New Financing Agreements

  • In September 2021, we signed a hunting license facility agreement with a leading European financial institution for an amount of up to $150 million for the purposes of financing the acquisition cost of dry bulk vessels. The new facility will be repayable up to July 2022.


C. Dividend announcements

  • On October 1, 2021, we declared a dividend for the quarter ended September 30, 2021, of $0.115 per share on our common stock, which will be paid on November 5, 2021, to stockholders of record of common stock as of October 20, 2021.

  • On October 1, 2021, we declared a dividend of $0.476563 per share on our Series B Preferred Stock, a dividend of $0.531250 per share on our Series C Preferred Stock, a dividend of $0.546875 per share on our Series D Preferred Stock and a dividend of $0.554688 per share on our Series E Preferred Stock, which were all paid on October 15, 2021 to holders of record as of October 14, 2021.


Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:

“The container market rebound that began in the second half of last year is continuing, drawing strength from favorable supply and demand dynamics. The availability of containerships in the market has been stretched thin due to high cargo volumes and strong tonnage demand, that has been exacerbated by port congestion and an overall shortage of equipment.

All our containerships chartered during the quarter have been fixed at increasingly high levels of hire.

On the dry bulk side, we took delivery of 20 additional vessels, bringing the number of dry bulk vessels that have been delivered to us to 34. The remaining 3 ships are expected to be delivered by year-end. All our dry bulk vessels are employed in the spot market, yielding very healthy returns.

Contracted revenues have reached US$ 3.3 billion and the average time charter duration for our containership fleet stands at more than four years. We have 9 containerships coming off charter by the end of next year and 37 dry bulk vessels operating in the spot market, favorably positioning our company should the currently strong market conditions continue.”


Financial Summary

Nine-month period ended
September 30,

Three-month period ended
September 30,

(Expressed in thousands of U.S. dollars, except share and per share data)

2020

2021

2020

2021

Voyage revenue

$341,176

$509,721

$107,903

$216,226

Accrued charter revenue (1)

$15,942

$3,170

$8,221

$1,024

Amortization of Time-charter assumed

$144

$(463

)

$49

$(118

)

Voyage revenue adjusted on a cash basis (2)

$357,262

$512,428

$116,173

$217,132

Adjusted Net Income available to common stockholders (3)

$91,005

$177,802

$26,740

$81,540

Weighted Average number of shares

120,319,521

122,845,943

121,094,924

123,299,457

Adjusted Earnings per share (3)

$0.76

$1.45

$0.22

$0.66

Net Income / (Loss)

$(18,198

)

$273,967

$25,249

$115,210

Net Income / (Loss) available to common stockholders

$(40,894

)

$250,665

$17,395

$107,356

Weighted Average number of shares

120,319,521

122,845,943

121,094,924

123,299,457

Earnings / (Losses) per share

$(0.34

)

$2.04

$0.14

$0.87

(1) Accrued charter revenue represents the difference between cash received during the period and revenue recognized on a straight-line basis. In the early years of a charter with escalating charter rates, voyage revenue will exceed cash received during the period and during the last years of such charter cash received will exceed revenue recognized on a straight-line basis.
(2) Voyage revenue adjusted on a cash basis represents Voyage revenue after adjusting for non-cash “Accrued charter revenue” recorded under charters with escalating charter rates. However, Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). We believe that the presentation of Voyage revenue adjusted on a cash basis is useful to investors because it presents the charter revenue for the relevant period based on the then current daily charter rates. The increases or decreases in daily charter rates under our charter party agreements are described in the notes to the “Fleet List” below.
(3) Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are non-GAAP measures. Refer to the reconciliation of Net Income to Adjusted Net Income.

Non-GAAP Measures

The Company reports its financial results in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures used in managing the business may provide users of these financial measures additional meaningful comparisons between current results and results in prior operating periods. Management believes that these non-GAAP financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain items that impact the overall comparability. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. The tables below set out supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and the nine-month periods ended September 30, 2021 and 2020. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, voyage revenue or net income as determined in accordance with GAAP. Non-GAAP financial measures include (i) Voyage revenue adjusted on a cash basis (reconciled above), (ii) Adjusted Net Income available to common stockholders and (iii) Adjusted Earnings per Share.

Exhibit I
Reconciliation of Net Income to Adjusted Net Income available to common stockholders and Adjusted Earnings per Share

Nine-month period ended
September 30,

Three-month period ended
September 30,

(Expressed in thousands of U.S. dollars, except share and per share data)

2020

2021

2020

2021

Net Income / (Loss)

$

(18,198

)

$

273,967

$

25,249

$

115,210

Earnings allocated to Preferred Stock

(23,315

)

(23,302

)

(7,854

)

(7,854

)

Gain on retirement of Preferred Stock

619

-

-

-

Net Income / (Loss) available to common stockholders

(40,894

)

250,665

17,395

107,356

Accrued charter revenue

15,942

3,170

8,221

1,024

General and administrative expenses - non-cash component

2,416

5,523

908

2,316

Amortization of Time charter assumed

144

(463

)

49

(118

)

Realized (gain) / loss on Euro/USD forward contracts (1)

(488

)

26

(410

)

200

Vessels’ impairment loss

31,577

-

-

-

(Gain) / loss on sale / disposal of vessels, net

65,260

(18,075

)

432

(16,669

)

Non-recurring, non-cash write-off of loan deferred financing costs

478

363

-

-

Loss on vessels held for sale

14,359

-

-

-

Gain on sale / disposal of vessel by a jointly owned company with York included in equity gain on investments

-

(5,726

)

-

(5,726

)

Swap’s breakage costs

6

-

6

-

Loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments

2,205

1,219

139

207

Fair value measurement / Change in fair value of equity securities

-

(58,144

)

-

(7,050

)

Other non-recurring, non-cash items

-

(756

)

-

-

Adjusted Net Income available to common stockholders

$

91,005

$

177,802

$

26,740

$

81,540

Adjusted Earnings per Share

$

0.76

$

1.45

$

0.22

$

0.66

Weighted average number of shares

120,319,521

122,845,943

121,094,924

123,299,457

Adjusted Net Income available to common stockholders and Adjusted Earnings per Share represent Net Income after earnings allocated to preferred stock and gain on retirement of preferred stock, but before non-cash “Accrued charter revenue” recorded under charters with escalating charter rates, realized (gain)/loss on Euro/USD forward contracts, vessels’ impairment loss, (gain)/loss on sale / disposal of vessels, net, loss on vessels held for sale, gain on sale / disposal of vessel by a jointly owned company with York included in equity gain on investments, fair value measurement of equity securities / change in fair value of equity securities, swap’s breakage costs, non-recurring, non-cash write-off of loan deferred financing costs, general and administrative expenses - non-cash component, non-cash changes in fair value of derivatives and other non-recurring, non-cash items. “Accrued charter revenue” is attributed to the timing difference between the revenue recognition and the cash collection. However, Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are not recognized measurements under U.S. GAAP. We believe that the presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our ability to service additional debt and make capital expenditures. In addition, we believe that Adjusted Net Income available to common stockholders and Adjusted Earnings per Share are useful in evaluating our operating performance and liquidity position compared to that of other companies in our industry because the calculation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share generally eliminates the effects of the accounting effects of capital expenditures and acquisitions, certain hedging instruments and other accounting treatments, items which may vary for different companies for reasons unrelated to overall operating performance and liquidity. In evaluating Adjusted Net Income available to common stockholders and Adjusted Earnings per Share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Net Income available to common stockholders and Adjusted Earnings per Share should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

(1) Items to consider for comparability include gains and charges. Gains positively impacting Net Income available to common stockholders are reflected as deductions to Adjusted Net Income available to common stockholders. Charges negatively impacting Net Income available to common stockholders are reflected as increases to Adjusted Net Income available to common stockholders.

Results of Operations

Three-month period ended September 30, 2021 compared to the three-month period ended September 30, 2020

During the three-month periods ended September 30, 2021 and 2020, we had an average of 91.7 and 59.5 vessels, respectively, in our fleet.

In the three-month period ended September 30, 2021, we accepted delivery of the secondhand container vessel Gialova with a TEU capacity of 4,578 and we sold the container vessel Venetiko with a TEU capacity of 5,928. Furthermore, during the three-month period ended September 30, 2021, we accepted delivery of 27 secondhand dry bulk vessels (Eracle, Peace, Bernis, Sauvan, Verity, Pride, Alliance, Manzanillo, Dawn, Acuity, Seabird, Discovery, Aeolian, Comity, Clara, Serena, Merida, Progress, Miner, Parity, Uruguay, Resource, Konstantinos, Taibo, Thunder, Athena and Farmer) with an aggregate DWT of 1,337,162.

In the three-month period ended September 30, 2020, we accepted delivery of the newbuild container vessels YM Triumph, YM Truth and YM Totality with an aggregate TEU capacity of 38,070 and the secondhand container vessel Scorpius (ex. JPO Scorpius) with a TEU capacity of 2,572. Additionally, we sold the container vessels Kawasaki, Kokura and Zagora with an aggregate TEU capacity of 15,968.

In the three-month periods ended September 30, 2021 and 2020, our fleet ownership days totaled 8,434 and 5,478 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

Consolidated Financial Results and vessels’ operational data


(Expressed in millions of U.S. dollars,
except percentages)

Three-month period ended
September 30,

Change

Percentage
Change

2020

2021

Voyage revenue

$

107.9

$

216.2

$

108.3

100.4%

Voyage expenses

(2.4)

(4.4)

2.0

83.3%

Voyage expenses – related parties

(1.6)

(3.0)

1.4

87.5%

Vessels’ operating expenses

(30.2)

(49.7)

19.5

64.6%

General and administrative expenses

(1.5)

(2.3)

0.8

53.3%

Management fees – related parties

(5.5)

(8.2)

2.7

49.1%

General and administrative expenses - non-cash component

(0.9)

(2.3)

1.4

155.6%

Amortization of dry-docking and special survey costs

(2.2)

(2.7)

0.5

22.7%

Depreciation

(25.9)

(37.3)

11.4

44.0%

Gain /(loss) on sale / disposal of vessels

(0.4)

16.7

17.1

n.m.

Interest income

0.3

0.1

(0.2)

(66.7%)

Interest and finance costs

(16.1)

(24.2)

8.1

50.3%

Change in fair value measurement of equity securities

-

7.1

7.1

n.m.

Income from equity method investments

4.0

7.1

3.1

77.5%

Dividend income from investment in equity securities

-

1.8

1.8

n.m.

Other

0.1

0.5

0.4

n.m.

Loss on derivative instruments

(0.4)

(0.2)

(0.2)

(50.0%)

Net Income

$

25.2

$

115.2

(Expressed in millions of U.S. dollars,
except percentages)

Three-month period ended
September 30,

Percentage
Change

2020

2021

Change

Voyage revenue

$

107.9

$

216.2

$

108.3

100.4%

Accrued charter revenue

8.2

1.0

(7.2)

(87.8%)

Amortization of time charter assumed

-

(0.1)

(0.1)

n.m.

Voyage revenue adjusted on a cash basis (1)

$

116.1

$

217.1

$

101.0

87.0%

Vessels’ operational data

Three-month period ended
September 30,

Percentage
Change

2020

2021

Change

Average number of vessels

59.5

91.7

32.2

54.1%

Ownership days

5,478

8,434

2,956

54.0%

Number of vessels under dry-docking

2

5

3


Segmental Financial Summary

Three-month period ended September 30, 2021

Container
vessels

Dry bulk
vessels

Other

Total

Voyage revenue

$182.4

$33.8

$

-

$216.2

Voyage expenses

(2.4)

(2.0)

-

(4.4)

Voyage expenses – related parties

(2.6)

(0.4)

-

(3.0)

Vessels’ operating expenses

(40.8)

(8.9)

-

(49.7)

General and administrative expenses

(1.9)

(0.4)

-

(2.3)

Management fees – related parties

(6.6)

(1.6)

-

(8.2)

General and administrative expenses - non-cash component

(1.9)

(0.4)

-

(2.3)

Amortization of dry-docking and special survey costs

(2.7)

-

-

(2.7)

Depreciation

(33.7)

(3.6)

-

(37.3)

Gain on sale / disposal of vessels

16.7

-

-

16.7

Interest income

0.1

-

-

0.1

Interest and finance costs

(22.9)

(1.3)

-

(24.2)

Change in fair value measurement of equity securities

-

-

7.1

7.1

Income from equity method investments

-

-

7.1

7.1

Dividend income from investment in equity securities

-

-

1.8

1.8

Other

0.5

-

-

0.5

Loss on derivative instruments

(0.2)

-

-

(0.2)

Net Income

$ 84.0

$ 15.2

$ 16.0

$ 115.2

(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Financial Summary” above for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue increased by 100.4%, or $108.3 million, to $216.2 million during the three-month period ended September 30, 2021, from $107.9 million during the three-month period ended September 30, 2020. The increase is mainly attributable to (i) revenue earned by five container vessels acquired during the second half of 2020 as well as the 16 container vessels and 26 dry bulk vessels acquired during the nine-month period ended September 30, 2021 and (ii) increased charter rates in certain of our container vessels, partly off-set by revenue not earned by two container vessels sold during the second half of 2020 and three container vessels sold during the nine-month period ended September 30, 2021.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”) increased by 87.0%, or $101.0 million, to $217.1 million during the three-month period ended September 30, 2021, from $116.1 million during the three-month period ended September 30, 2020. Accrued charter revenue for the three-month periods ended September 30, 2021 and 2020 was a positive amount of $1.0 million and $8.2 million, respectively.

Voyage Expenses

Voyage expenses were $4.4 million and $2.4 million for the three-month periods ended September 30, 2021 and 2020, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties were $3.0 million and $1.6 million for the three-month periods ended September 30, 2021 and 2020, respectively. Voyage expenses – related parties represent (i) fees of 1.25% in the aggregate on voyage revenues charged by a related manager and a service provider and (ii) charter brokerage fees (in respect of our container vessels) payable to two related charter brokerage companies for an amount of approximately $0.3 million and $0.3 million, in the aggregate, for the three-month periods ended September 30, 2021 and 2020, respectively.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain under derivative contracts entered into in relation to foreign currency exposure, were $49.7 million and $30.2 million during the three-month periods ended September 30, 2021 and 2020, respectively. Daily vessels’ operating expenses were $5,895 and $5,520 for the three-month periods ended September 30, 2021 and 2020, respectively. The increase in the daily operating expenses over the two quarters is mainly attributed to increased one-time predelivery expenses for the acquisition of dry bulk vessels and increased crew costs related to Covid-19 pandemic measures. Daily operating expenses are calculated as vessels’ operating expenses for the period over the ownership days of the period.

General and Administrative Expenses

General and administrative expenses were $2.3 million and $1.5 million during the three-month periods ended September 30, 2021 and 2020, respectively, and both include $0.63 million paid to a related manager.

Management Fees – related parties

Management fees paid to our related party managers were $8.2 million and $5.5 million during the three-month periods ended September 30, 2021 and 2020, respectively.

General and Administrative Expenses - non-cash component

General and administrative expenses - non-cash component for the three-month period ended September 30, 2021 amounted to $2.3 million, representing the value of the shares issued to a related party manager on September 30, 2021. General and administrative expenses - non-cash component for the three-month period ended September 30, 2020 amounted to $0.9 million, representing the value of the shares issued to a related party manager on September 30, 2020.

Amortization of Dry-Docking and Special Survey

Amortization of deferred dry-docking and special survey costs was $2.7 million and $2.2 million during the three-month periods ended September 30, 2021 and 2020, respectively. During the three-month period ended September 30, 2021, two vessels underwent and completed their dry-docking and special survey and three vessels were in the process of completing their dry-docking and special survey. During the three-month period ended September 30, 2020, two vessels underwent and completed their dry-docking and special survey.

Depreciation

Depreciation expense for the three-month periods ended September 30, 2021 and 2020 was $37.3 million and $25.9 million, respectively.

Gain / (loss) on Sale / Disposal of Vessels

During the three-month period ended September 30, 2021, we recorded a gain of $16.5 million from the sale of the container vessel Venetiko, which was classified as vessel held for sale as at June 30, 2021 (initially classified as vessel held for sale as of March 31, 2021) and an additional gain of $0.2 million from the sale of the container vessel Halifax Express, which was sold in the first half of 2021.

During the three-month period ended September 30, 2020, we recorded an additional loss of $0.4 million, in the aggregate, from the sale of the container vessel Zagora which was classified as vessel held for sale as at December 31, 2019 and from the sale of the container vessels Kawasaki and Kokura which were classified as vessels held for sale as at June 30, 2020.

Loss on Vessels Held for Sale

During the three-month period ended September 30, 2021, the container vessels ZIM New York, and ZIM Shanghai were classified as vessels held for sale (initially classified as vessel held for sale as of June 30, 2021). No loss on vessels held for sale was recorded during the third quarter of 2021, since each vessel’s estimated market value exceeded each vessel’s carrying value.

Interest Income

Interest income amounted to $0.1 million and $0.3 million for the three-month periods ended September 30, 2021 and 2020, respectively.

Interest and Finance Costs

Interest and finance costs were $24.2 million and $16.1 million during the three-month periods ended September 30, 2021 and 2020, respectively. The increase is mainly attributable to the increased average loan balances during the three-month period ended September 30, 2021 compared to the three-month period ended September 30, 2020, partly off-set by decreased financing cost during the three-month period ended September 30, 2021 compared to the three-month period ended September 30, 2020.

Swaps’ Breakage Costs

During the three-month period ended September 30, 2020, we terminated two interest rate derivative instruments that qualified for hedge accounting and we paid the counterparties breakage costs in the amount of $0.006 million in the aggregate.

Change in Fair Value of Equity securities/ Dividend income from investment in equity securities

Change in fair value of equity securities of $7.1 million for the three-month period ended September 30, 2021, represents the difference between the aggregate fair value of 1,221,800 ordinary shares of ZIM that we owned as at September 30, 2021 compared to the fair value of such shares as of June 30, 2021. ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares on January 27, 2021. Furthermore, in the three-month period ended September 30, 2021 we received a special dividend from ZIM in the amount of $1.8 million.

Income from Equity Method Investments

During the three-month period ended September 30, 2021, we recorded an income from equity method investments of $7.1 million representing our share of the income in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated (the “Framework Deed”), with York. As of September 30, 2021, six companies are jointly owned with York (of which, four companies currently own container vessels). During the three-month period ended September 30, 2020, we recorded an income from equity method investments of $4.0 million relating to investments under the Framework Deed.

Loss on Derivative Instruments

The fair value of our ten interest rate derivative instruments and our two cross currency rate swaps which were outstanding as of September 30, 2021 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2021, the fair value of these ten interest rate derivative instruments and two cross currency rate swaps, in aggregate, amounted to a liability of $13.4 million. The change in the fair value of the interest rate derivative instruments and cross currency rate swaps that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item while the change in the fair value of the interest rate derivatives, representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in Gain/(Loss) on Derivative Instruments. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in Gain/(Loss) on Derivative Instruments. For the three-month period ended September 30, 2021, a loss of $1.5 million has been included in OCI and a loss of $0.1 million has been included in Loss on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the three-month period ended September 30, 2021.

Cash Flows

Three-month periods ended September 30, 2021 and 2020

Condensed cash flows

Three-month period ended
September 30,

(Expressed in millions of U.S. dollars)

2020

2021

Net Cash Provided by Operating Activities

$66.7

$125.9

Net Cash Used in Investing Activities

$(23.3)

$(395.8)

Net Cash Provided by / (Used in) Financing Activities

$(57.2)

$219.3

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the three-month period ended September 30, 2021, increased by $59.2 million to $125.9 million, from $66.7 million for the three-month period ended September 30, 2020. The increase is mainly attributable to increased cash from operations of $101.0 million, partly off-set by the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $16.4 million, by the increased payments for interest (including swap payments) of $4.6 million during the three-month period ended September 30, 2021 compared to the three-month period ended September 30, 2020 and by increased dry-docking and special survey costs of $0.8 million during the three-month period ended September 30, 2021 compared to the three-month period ended September 30, 2020.

Net Cash Used in Investing Activities

Net cash used in investing activities was $395.8 million in the three-month period ended September 30, 2021, which mainly consisted of (i) payments for the acquisition of 10 secondhand dry bulk vessels, (ii) settlement payments for the delivery of one container vessel and 15 secondhand dry bulk vessels, (iii) advance payments for the acquisition of five secondhand dry bulk vessels, (iv) payments for the acquisition of the equity interest of sixteen companies (which owned or had committed to acquire dry bulk vessels) owned by our Chairman and Chief Executive Officer, Konstantinos Konstantakopoulos in accordance with the Share and Purchase agreement dated June 14, 2021 (agreed to acquire the equity interest of these companies at cost with no mark-up or premium payable to Mr. Konstantakopoulos or his affiliated entities) and (v) payments for upgrades for certain of our container and dry bulk vessels, partly off-set by proceeds we received from the sale of one container vessel and by return of capital we received from one entity jointly -owned with York pursuant to the Framework Deed.

Net cash used in investing activities was $23.3 million in the three-month period ended September 30, 2020, which mainly consisted of payments for upgrades for certain of our container vessels and payments for the delivery of three newbuild container vessels and one container secondhand vessel, partly off-set by proceeds we received from the sale of three container vessels.

Net Cash Provided by / (Used in) Financing Activities

Net cash provided by financing activities was $219.3 million in the three-month period ended September 30, 2021, which mainly consisted of (a) $240.6 million net proceeds relating to our debt financing agreements (including proceeds of $300.9 million we received from our debt financing agreements), (b) $10.8 million we paid for dividends to holders of our common stock for the second quarter of 2021 and (c) $0.9 million we paid for dividends to holders of our 7.625% Series B Cumulative Redeemable Perpetual Preferred Stock (“Series B Preferred Stock”), $2.1 million we paid for dividends to holders of our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock (“Series C Preferred Stock”), $2.2 million we paid for dividends to holders of our 8.75% Series D Cumulative Redeemable Perpetual Preferred Stock (“Series D Preferred Stock”) and $2.5 million we paid for dividends to holders of our 8.875% Series E Cumulative Redeemable Perpetual Preferred Stock (“Series E Preferred Stock”) for the period from April 15, 2021 to July 14, 2021.

Net cash used in financing activities was $57.2 million in the three-month period ended September 30, 2020, which mainly consisted of (a) $32.7 million net payments relating to our debt financing agreements, (b) $9.3 million we paid for dividends to holders of our common stock for the second quarter of 2020 and (c) $0.9 million we paid for dividends to holders of our 7.625% Series B Preferred Stock, $2.1 million we paid for dividends to holders of our 8.500% Series C Preferred Stock, $2.2 million we paid for dividends to holders of our 8.75% Series D Preferred Stock and $2.5 million we paid for dividends to holders of our 8.875% Series E Preferred Stock for the period from April 15, 2020 to July 14, 2020.

Nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020

During the nine-month periods ended September 30, 2021 and 2020, we had an average of 75.4 and 59.9 vessels, respectively, in our fleet.

In the nine-month period ended September 30, 2021, (i) we accepted delivery of the newbuild container vessels YM Target and YM Tiptop with an aggregate TEU capacity of 25,380, the secondhand container vessels Aries, Argus, Glen Canyon, Androusa, Norfolk, Porto Cheli, Porto Kagio, Porto Germeno and Gialova with an aggregate TEU capacity of 49,909 and we sold the container vessels Halifax Express, Prosper and Venetiko with an aggregate TEU capacity of 12,322 and (ii) we acquired (a) the 75% equity interest of York Capital Management in each of the 11,010 TEU container vessels Cape Kortia and Cape Sounio and (b) the 51% equity interest of York Capital Management in each of the 11,010 TEU container vessels Cape Tainaro, Cape Artemisio and Cape Akritas and as a result we obtained 100% of the equity interest in each of these five vessels.

Furthermore, in the nine-month period ended September 30, 2021, we acquired all of the equity interest of sixteen companies (which owned or had committed to acquire dry bulk vessels) owned by our Chairman and Chief Executive Officer, Konstantinos Konstantakopoulos. We agreed to acquire these companies from Mr. Konstantakopoulos at cost with no mark-up or premium payable to Mr. Konstantakopoulos or his affiliated entities. Mr. Konstantakopoulos will not receive a profit as a result of the acquisition. Fifteen of the dry bulk vessels (Pegasus, Builder, Adventure, Eracle, Peace, Sauvan, Pride, Alliance, Manzanillo, Acuity, Seabird, Aeolian, Comity, Athena and Farmer) that were part of the acquisition with an aggregate DWT of 850,163, were delivered to us during the nine-month period ended September 30, 2021. In addition, in the nine-month period ended September 30, 2021, we accepted delivery of another fifteen secondhand dry bulk vessels (Bernis, Verity, Dawn, Discovery, Clara, Serena, Merida, Progress, Miner, Parity, Uruguay, Resource, Konstantinos, Taibo and Thunder) with an aggregate DWT of 659,021.

In the nine-month periods ended September 30, 2020, we accepted delivery of the newbuild vessels YM Triumph, YM Truth and YM Totality with an aggregate TEU capacity of 38,070 and the secondhand vessels Virgo (ex. JPO Virgo) and Scorpius (ex. JPO Scorpius) with a TEU capacity of 6,830; and we sold the vessels Neapolis, Kawasaki, Kokura and Zagora with an aggregate TEU capacity of 17,613.

In the nine-month periods ended September 30, 2021 and 2020, our fleet ownership days totaled 20,583 and 16,413 days, respectively. Ownership days are one of the primary drivers of voyage revenue and vessels’ operating expenses and represent the aggregate number of days in a period during which each vessel in our fleet is owned.

Consolidated Financial Results and vessels’ operational data (1)

(Expressed in millions of U.S. dollars,
except percentages)

Nine-month period ended
September 30,

Percentage
Change

2020

2021

Change

Voyage revenue

$

341.2

$

509.7

$

168.5

49.4%

Voyage expenses

(6.4)

(7.5)

1.1

17.2%

Voyage expenses – related parties

(4.7)

(7.3)

2.6

55.3%

Vessels’ operating expenses

(85.0)

(119.3)

34.3

40.4%

General and administrative expenses

(5.3)

(6.0)

0.7

13.2%

Management fees – related parties

(16.0)

(19.9)

3.9

24.4%

General and administrative expenses - non-cash component

(2.4)

(5.5)

3.1

129.2%

Amortization of dry-docking and special survey costs

(6.8)

(7.6)

0.8

11.8%

Depreciation

(81.6)

(96.0)

14.4

17.6%

Gain / (loss) on sale / disposal of vessels, net

(65.3)

18.1

83.4

n.m.

Loss on vessels held for sale

(14.4)

-

14.4

n.m.

Vessels’ impairment loss

(31.6)

-

31.6

n.m.

Foreign exchange gains / (losses)

(0.2)

0.2

0.4

n.m.

Interest income

1.5

1.6

0.1

6.7%

Interest and finance costs

(51.5)

(60.8)

9.3

18.1%

Fair value measurement of equity securities

-

58.1

58.1

n.m.

Income from equity method investments

12.2

12.0

(0.2)

(1.6%)

Dividend income from investment in equity securities

-

1.8

1.8

n.m.

Other

0.5

3.6

3.1

n.m.

Loss on derivative instruments

(2.4)

(1.2)

(1.2)

(50.0%)

Net Income / (Loss)

$

(18.2)

$

274.0

(Expressed in millions of U.S. dollars,
except percentages)

Nine-month period ended
September 30,

Percentage
Change

2020

2021

Change

Voyage revenue

$

341.2

$

509.7

$

168.5

49.4%

Accrued charter revenue

15.9

3.2

(12.7)

(79.9%)

Amortization of time charter assumed

0.2

(0.5)

(0.7)

n.m.

Voyage revenue adjusted on a cash basis (2)

$

357.3

$

512.4

$

155.1

43.4%

Vessels’ operational data

Nine-month period ended
September 30,

Percentage

2020

2021

Change

Change

Average number of vessels

59.9

75.4

15.5

25.9%

Ownership days

16,413

20,583

4,170

25.4%

Number of vessels under dry-docking

9

14

5


Segmental Financial Summary (1)

Nine-month period ended September 30, 2021

Container
vessels

Dry bulk
vessels

Other

Total

Voyage revenue

$475.1

$34.6

$

-

$509.7

Voyage expenses

(5.4

)

(2.1

)

-

(7.5

)

Voyage expenses – related parties

(6.9

)

(0.4

)

-

(7.3

)

Vessels’ operating expenses

(110.2

)

(9.1

)

-

(119.3

)

General and administrative expenses

(5.6

)

(0.4

)

-

(6.0

)

Management fees – related parties

(18.3

)

(1.6

)

-

(19.9

)

General and administrative expenses - non-cash component

(5.0

)

(0.5

)

-

(5.5

)

Amortization of dry-docking and special survey costs

(7.6

)

-

-

(7.6

)

Depreciation

(92.3

)

(3.7

)

-

(96.0

)

Gain on sale / disposal of vessels, net

18.1

-

-

18.1

Foreign exchange gains

0.2

-

-

0.2

Interest income

1.6

-

-

1.6

Interest and finance costs

(59.5

)

(1.3

)

-

(60.8

)

Fair value measurement of equity securities

-

-

58.1

58.1

Income from equity method investments

-

-

12.0

12.0

Dividend income from investment in equity securities

-

-

1.8

1.8

Other

3.6

-

-

3.6

Loss on derivative instruments

(1.2

)

-

-

(1.2

)

Net Income

$ 186.6

$ 15.5

$ 71.9

$ 274.0

(1) The results of dry bulk vessels are included from June 14, 2021. Prior to that, our results were attributable to container vessels only.
(2) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Financial Summary” above for the reconciliation of Voyage revenue adjusted on a cash basis.

Voyage Revenue

Voyage revenue increased by 49.4%, or $168.5 million, to $509.7 million during the nine-month period ended September 30, 2021, from $341.2 million during the nine-month period ended September 30, 2020. The increase is mainly attributable to (i) revenue earned by five container vessels acquired during the second half of 2020 as well as the 16 container vessels and 26 dry bulk vessels acquired during the nine-month period ended September 30, 2021, (ii) increased charter rates in certain of our container vessels during the nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020, partly off-set by revenue not earned by five container vessels sold during the year ended December 31, 2020 and three container vessels sold during the nine-month period ended September 30, 2021.

Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 43.4%, or $155.1 million, to $512.4 million during the nine-month period ended September 30, 2021, from $357.3 million during the nine-month period ended September 30, 2020. Accrued charter revenue for the nine-month periods ended September 30, 2021 and 2020 was a positive amount of $3.2 million and $15.9 million, respectively.

Voyage Expenses

Voyage expenses were $7.5 million and $6.4 million for the nine-month periods ended September 30, 2021 and 2020, respectively. Voyage expenses mainly include (i) off-hire expenses of our vessels, primarily related to fuel consumption and (ii) third party commissions.

Voyage Expenses – related parties

Voyage expenses – related parties were $7.3 million and $4.7 million for the nine-month periods ended September 30, 2021 and 2020, respectively. Voyage expenses – related parties represent (i) fees of 1.25% in the aggregate on voyage revenues charged by a related manager and a service provider and (ii) charter brokerage fees (in respect of our container vessels) payable to two related charter brokerage companies for an amount of approximately $0.9 million and $0.5 million, in the aggregate, for the nine-month periods ended September 30, 2021 and 2020, respectively.

Vessels’ Operating Expenses

Vessels’ operating expenses, which also include the realized gain under derivative contracts entered into in relation to foreign currency exposure, were $119.3 million and $85.0 million during the nine-month periods ended September 30, 2021 and 2020, respectively. Daily vessels’ operating expenses were $5,797 and $5,179 for the nine-month periods ended September 30, 2021 and 2020, respectively. The increase in the daily operating expenses over the two nine-month periods is mainly attributed to increased one-time predelivery expenses for the acquisition of dry bulk vessels and increased crew costs related to Covid-19 pandemic measures. Daily operating expenses are calculated as vessels’ operating expenses for the period over the ownership days of the period.

General and Administrative Expenses

General and administrative expenses were $6.0 million and $5.3 million during the nine-month periods ended September 30, 2021 and 2020, respectively, and both include $1.9 million paid to a related manager.

Management Fees – related parties

Management fees paid to our related party managers were $19.9 million and $16.0 million during the nine-month periods ended September 30, 2021 and 2020, respectively.

General and Administrative Expenses - non-cash component

General and administrative expenses - non-cash component for the nine-month period ended September 30, 2021 amounted to $5.5 million, representing the value of the shares issued to a related party manager on March 31, 2021, on June 30, 2021 and September 30, 2021. General and administrative expenses - non-cash component for the nine-month period ended September 30, 2020 amounted to $2.4 million, representing the value of the shares issued to a related party manager on March 30, 2020, June 30, 2020 and September 30, 2020.

Amortization of Dry-Docking and Special Survey

Amortization of deferred dry-docking and special survey costs was $7.6 million and $6.8 million during the nine-month periods ended September 30, 2021 and 2020, respectively. During the nine-month period ended September 30, 2021, 11 vessels underwent and completed their dry-docking and special survey and three vessels were in the process of completing their dry-docking and special survey. During the nine-month period ended September 30, 2020, nine vessels underwent and completed their dry-docking and special survey.

Depreciation

Depreciation expense for the nine-month periods ended September 30, 2021 and 2020 was $96.0 million and $81.6 million, respectively.

Gain / (loss) on Sale / Disposal of Vessels, net

During the nine-month period ended September 30, 2021, we recorded a net gain of $18.1 million from the sale of the container vessels Prosper (asset held for sale as at March 31, 2021), Halifax Express (asset held for sale as at December 31, 2020) and Venetiko (asset held for sale as at March 31, 2021 and June 30, 2021). During the nine-month period ended September 30, 2020, we recorded an aggregate net loss of $65.3 million from the sale of the container vessels Kawasaki, Kokura, Neapolis and Zagora. Neapolis and Zagora were classified as assets held for sale as at December 31, 2019.

Loss on vessels held for sale

During the nine-month period ended September 30, 2021, the container vessels ZIM New York and ZIM Shanghai were classified as vessels held for sale (initially classified as vessels’ held for sale on June 30, 2021). No loss on vessels held for sale was recorded during the nine-month period ended September 30, 2021, since each vessel’s estimated market value exceeded each vessel’s carrying value. During the nine-month period ended September 30, 2020, we recorded a loss on vessels held for sale of $14.4 million representing the expected loss from sale of the container vessel Singapore Express during the next twelve-month period.

Vessels’ impairment loss

During the nine-month period ended September 30, 2021 no impairment loss was recorded. During the nine-month period ended September 30, 2020, we recorded an impairment loss in relation to five of our container vessels in the amount of $31.6 million, in the aggregate.

Interest Income

Interest income amounted to $1.6 million and $1.5 million for the nine-month periods ended September 30, 2021 and 2020, respectively.

Interest and Finance Costs

Interest and finance costs were $60.8 million and $51.5 million during the nine-month periods ended September 30, 2021 and 2020, respectively. The increase is mainly attributable to the increased average loan balances during the nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020, partly off-set by the decreased financing cost during the nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020.

Swaps’ Breakage Costs

During the nine-month period ended September 30, 2020, we terminated two interest rate derivative instruments that qualified for hedge accounting and we paid the counterparties breakage costs in the amount of $0.006 million in the aggregate.

Fair value measurement of equity securities / Dividend income from investment in equity securities

Fair value measurement of equity securities of $58.1 million for the nine-month period ended September 30, 2021, represents the difference between the aggregate fair value of 1,221,800 ordinary shares of ZIM that we owned as at September 30, 2021 of $61.9 million compared to the book value of these shares of $3.8 million as of December 31, 2020. ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares on January 27, 2021. Furthermore, in the nine-month period ended September 30, 2021, we received a special dividend from ZIM in the amount of $1.8 million.

Income from Equity Method Investments

During the nine-month period ended September 30, 2021, we recorded an income from equity method investments of $12.0 million representing our share of the income in jointly owned companies pursuant to the Framework Deed dated May 15, 2013, as amended and restated (the “Framework Deed”), with York. Since late March 2021, we have held 100% of the equity interest in five previously jointly owned companies with York, and since then these five companies are consolidated in our consolidated financial statements. As of September 30, 2021, six companies are jointly owned with York (of which, four companies currently own container vessels). During the nine-month period ended September 30, 2020, we recorded an income from equity method investments of $12.2 million relating to investments under the Framework Deed.

Loss on Derivative Instruments

The fair value of our ten interest rate derivative instruments and our two cross currency rate swaps which were outstanding as of September 30, 2021 equates to the amount that would be paid by us or to us should those instruments be terminated. As of September 30, 2021, the fair value of these twelve derivative instruments, in aggregate, amounted to a liability of $13.4 million. The change in the fair value of the interest rate derivative instruments and cross currency rate swaps that qualified for hedge accounting is recorded in “Other Comprehensive Income” (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item while the change in the fair value of the interest rate derivatives representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in Gain/(Loss) on Derivative Instruments. The change in the fair value of the interest rate derivative instruments that did not qualify for hedge accounting is recorded in Gain/(Loss) on Derivative Instruments. For the nine-month period ended September 30, 2021, a loss of $0.6 million has been included in OCI and a loss of $0.3 million has been included in Loss on derivative instruments in the consolidated statement of income, resulting from the fair market value change of the interest rate derivative instruments during the nine-month period ended September 30, 2021.

Cash Flows

Nine-month periods ended September 30, 2021 and 2020

Condensed cash flows

Nine-month period ended
September 30,

(Expressed in millions of U.S. dollars)

2020

2021

Net Cash Provided by Operating Activities

$205.9

$301.1

Net Cash Used in Investing Activities

$(21.7)

$(677.2)

Net Cash Provided by / (Used in) Financing Activities

$(192.7)

$482.6

Net Cash Provided by Operating Activities

Net cash flows provided by operating activities for the nine-month period ended September 30, 2021, increased by $95.2 million to $301.1 million, from $205.9 million for the nine-month period ended September 30, 2020. The increase is mainly attributable to increased cash from operations of $155.2 million, partly off-set by the unfavorable change in working capital position, excluding the current portion of long-term debt and the accrued charter revenue (representing the difference between cash received in that period and revenue recognized on a straight-line basis) of $7.8 million, by the increased payments for interest (including swap payments) of $5.9 million during the nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020 and by the increased dry-docking and special survey costs of $3.3 million during the nine-month period ended September 30, 2021 compared to the nine-month period ended September 30, 2020.

Net Cash Provided Used in Investing Activities

Net cash used in investing activities was $677.2 million in the nine-month period ended September 30, 2021, which mainly consisted of (i) net payments for the acquisition of the 75% equity interest in two companies and of the 51% equity interest in three companies, previously jointly owned with York pursuant to the Framework Deed, (ii) payments for the delivery of two newbuild container vessels, nine secondhand container vessels and 28 dry bulk vessels, (iii) advance payments for the acquisition of one secondhand container vessel and six secondhand dry bulk vessels (iv) payments for the acquisition of the equity interest of sixteen companies (which owned or had committed to acquire dry bulk vessels) owned by our Chairman and Chief Executive Officer, Konstantinos Konstantakopoulos in accordance with the Share and Purchase agreement dated June 14, 2021 (agreed to acquire the equity interest of these companies at cost with no mark-up or premium payable to Mr. Konstantakopoulos or his affiliated entities) and (v) payments for upgrades for certain of our container and dry bulk vessels, partly off-set by proceeds we received from the sale of three container vessels and by return of capital we received from one entity jointly -owned with York pursuant to the Framework Deed.

Net cash used in investing activities was $21.7 million in the nine-month period ended September 30, 2020, which mainly consisted of payments for upgrades for certain of our container vessels and payments for the delivery of three newbuild container vessels and two second hand container vessels, partly off-set by proceeds we received from the sale of four of our container vessels and by return of capital we received from nine entities jointly -owned with York pursuant to the Framework Deed.

Net Cash Provided by / (Used in) Financing Activities

Net cash provided by financing activities was $482.6 million in the nine-month period ended September 30, 2021, which mainly consisted of (a) $550.0 million net proceeds relating to our debt financing agreements (including proceeds we received (i) from the issuance of €100.0 million unsecured bond on the Athens Exchange and (ii) from our debt financing agreements of an amount of $944.0 million), (b) $29.6 million we paid for dividends to holders of our common stock for the fourth quarter of 2020, the first quarter of 2021 and the second quarter of 2021 and (c) $2.8 million we paid for dividends to holders of our Series B Preferred Stock, $6.3 million we paid for dividends to holders of our Series C Preferred Stock, $6.6 million we paid for dividends to holders of our Series D Preferred Stock and $7.5 million we paid for dividends to holders of our Series E Preferred Stock for the periods from October 15, 2020 to January 14, 2021, January 15, 2021 to April 14, 2021 and April 15, 2021 to July 14, 2021.

Net cash used in financing activities was $192.7 million in the nine-month period ended September 30, 2020, which mainly consisted of (a) $133.2 million net payments relating to our debt financing agreements, (b) $25.2 million we paid for dividends to holders of our common stock for the fourth quarter of 2019, the first quarter of 2020 and the second quarter of 2020 and (c) $2.8 million we paid for dividends to holders of our 7.625% Series B Preferred Stock, $6.3 million we paid for dividends to holders of our 8.500% Series C Preferred Stock, $6.6 million we paid for dividends to holders of our 8.75% Series D Preferred Stock and $7.5 million we paid for dividends to holders of our 8.875% Series E Preferred Stock for the period from October 15, 2019 to January 14, 2020, January 15, 2020 to April 14, 2020 and April 15, 2020 to July 14, 2020.

Liquidity and Unencumbered Vessels

Cash and cash equivalents

As of September 30, 2021, we had a total cash liquidity of $298.4 million, consisting of cash, cash equivalents and restricted cash.

Debt-free vessels

As of October 26, 2021, the following vessels were free of debt.

Unencumbered Vessels
(Refer to fleet list for full details)

Vessel Name

Year
Built

TEU / DWT
Capacity

Containerships

ETOILE

2005

2,556

MICHIGAN

2008

1,300

MONEMVASIA (*)

1998

2,472

ARKADIA (*)

2001

1,550

Dry Bulk Vessels

CURACAO

2011

57,937

ROSE

2008

76,619

(*) Vessels acquired pursuant to the Framework Deed with York.

Conference Call details:

On Wednesday, October 27, 2021 at 8:30 a.m. EST, Costamare’s management team will hold a conference call to discuss the financial results. Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-844-887-9405 (from the US), 0808-238-9064 (from the UK) or +1-412-317-9258 (from outside the US and the UK). Please quote “Costamare”. A replay of the conference call will be available until November 3, 2021. The United States replay number is +1-877-344-7529; the standard international replay number is +1-412-317-0088; and the access code required for the replay is: 10161631.

Live webcast:
There will also be a simultaneous live webcast over the Internet, through the Costamare Inc. website (www.costamare.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Costamare Inc.

Costamare Inc. is one of the world’s leading owners and providers of containerships for charter. The Company has 47 years of history in the international shipping industry and a fleet of 78 containerships, with a total capacity of approximately 565,000 TEU (including one secondhand vessel that we have agreed to acquire and one vessel that we have agreed to sell) and 37 dry bulk vessels with a total capacity of approximately 1,910,000 DWT (including three secondhand vessels that we have agreed to acquire). Four of our containerships have been acquired pursuant to the Framework Deed with York by vessel-owning joint venture entities in which we hold a minority equity interest. The Company’s common stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock trade on the New York Stock Exchange under the symbols “CMRE”, “CMRE PR B”, “CMRE PR C”, “CMRE PR D” and “CMRE PR E”, respectively.

Forward-Looking Statements

This earnings release contains “forward-looking statements”. In some cases, you can identify these statements by forward-looking words such as “believe”, “intend”, “anticipate”, “estimate”, “project”, “forecast”, “plan”, “potential”, “may”, “should”, “could”, “expect” and similar expressions. These statements are not historical facts but instead represent only Costamare’s belief regarding future results, many of which, by their nature, are inherently uncertain and outside of Costamare’s control. It is possible that actual results may differ, possibly materially, from those anticipated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect future results, see the discussion in the Company’s Annual Report on Form 20-F (File No. 001-34934) under the caption “Risk Factors” and the Company’s Results for the Second Quarter and Six-Months Ended June 30, 2021 on Form 6-K (filed on July 28, 2021 with the SEC) under the caption “Risk Factor Update”.

Company Contacts:

Gregory Zikos - Chief Financial Officer
Konstantinos Tsakalidis - Business Development

Costamare Inc., Monaco
Tel: (+377) 93 25 09 40
Email: ir@costamare.com

Fleet List

The tables below provide additional information, as of October 26, 2021, about our fleet of containerships, including the vessel that we have agreed to acquire, the vessel we have agreed to sell, the vessels acquired pursuant to the Framework Deed and those vessels subject to sale and leaseback agreements. Each vessel is a cellular containership, meaning it is a dedicated container vessel.

Vessel Name

Charterer

Year Built

Capacity (TEU)

Current Daily Charter Rate(1) (U.S. dollars)

Expiration of Charter(2)

1

TRITON(ii)

Evergreen

2016

14,424

(*)

March 2026

2

TITAN(ii)

Evergreen

2016

14,424

(*)

April 2026

3

TALOS(ii)

Evergreen

2016

14,424

(*)

July 2026

4

TAURUS(ii)

Evergreen

2016

14,424

(*)

August 2026

5

THESEUS(ii)

Evergreen

2016

14,424

(*)

August 2026

6

YM TRIUMPH(ii)

Yang Ming

2020

12,690

(*)

May 2030

7

YM TRUTH(ii)

Yang Ming

2020

12,690

(*)

May 2030

8

YM TOTALITY(ii)

Yang Ming

2020

12,690

(*)

July 2030

9

YM TARGET(ii)

Yang Ming

2021

12,690

(*)

November 2030

10

YM TIPTOP(ii)

Yang Ming

2021

12,690

(*)

March 2031

11

CAPE AKRITAS

MSC

2016

11,010

33,000

August 2031

12

CAPE TAINARO

MSC

2017

11,010

33,000

April 2031

13

CAPE KORTIA

MSC

2017

11,010

33,000

August 2031

14

CAPE SOUNIO

MSC

2017

11,010

33,000

April 2031

15

CAPE ARTEMISIO

Hapag Lloyd

2017

11,010

36,650

March 2025

16

COSCO GUANGZHOU

COSCO/(*)

2006

9,469

30,900/72,700

April 2025(3)

17

COSCO NINGBO

COSCO/(*)

2006

9,469

30,900/72,700

April 2025(3)

18

YANTIAN

COSCO

2006

9,469

39,600

February 2024

19

COSCO HELLAS

COSCO

2006

9,469

39,600

February 2024

20

BEIJING

COSCO

2006

9,469

39,600

March 2024

21

MSC AZOV

MSC

2014

9,403

46,300

December 2026(4)

22

MSC AMALFI

MSC

2014

9,403

46,300

March 2027(5)

23

MSC AJACCIO

MSC

2014

9,403

46,300

February 2027(6)

24

MSC ATHENS(ii)

MSC

2013

8,827

45,300

January 2026(7)

25

MSC ATHOS(ii)

MSC

2013

8,827

45,300

February 2026(8)

26

VALOR

Hapag Lloyd

2013

8,827

32,400

April 2025

27

VALUE

Hapag Lloyd

2013

8,827

32,400

April 2025

28

VALIANT

Hapag Lloyd

2013

8,827

32,400

June 2025

29

VALENCE

Hapag Lloyd

2013

8,827

32,400

July 2025

30

VANTAGE

Hapag Lloyd

2013

8,827

32,400

September 2025

31

NAVARINO

MSC

2010

8,531

31,000

January 2025

32

MAERSK KLEVEN

Maersk

1996

8,044

25,000

June 2023(9)

33

MAERSK KOTKA

Maersk

1996

8,044

25,000

June 2023(9)

34

MAERSK KOWLOON

Maersk

2005

7,471

16,000

June 2022(10)

35

KURE

COSCO

1996

7,403

31,000

March 2023

36

MSC METHONI

MSC/Maersk

2003

6,724

29,000/46,500

July 2026(11)

37

PORTO CHELI

Maersk

2001

6,712

30,075

June 2026

38

YORK

Maersk

2000

6,648

21,250

August 2022

39

KOBE

RCL Feeder/ZIM

2000

6,648

14,500/45,000

July 2025(12)

40

SEALAND WASHINGTON

Maersk

2000

6,648

25,000

December 2022 (13)

41

SEALAND MICHIGAN

Maersk

2000

6,648

25,000

October 2022(13)

42

SEALAND ILLINOIS

Maersk

2000

6,648

25,000

October 2022 (13)

43

MAERSK KOLKATA

Maersk

2003

6,644

25,000

October 2022 (13)

44

MAERSK KINGSTON

Maersk

2003

6,644

25,000

October 2022 (13)

45

MAERSK KALAMATA

Maersk

2003

6,644

25,000

October 2022 (13)

46

ARIES

ONE

2004

6,492

(*)

December 2022

47

ARGUS

ONE

2004

6,492

(*)

January 2023

48

PORTO KAGIO

Maersk

2002

5,908

28,822

June 2026

49

GLEN CANYON

ONE/ZIM

2006

5,642

(*)/62,500

July 2025(14)

50

PORTO GERMENO

Maersk

2002

5,570

28,822

June 2026

51

ZIM NEW YORK(iii)

ZIM

2002

4,992

-

Vessel scheduled to be sold

52

LEONIDIO(ii)

Maersk

2014

4,957

14,200

December 2024(15)

53

KYPARISSIA(ii)

Maersk

2014

4,957

14,200

November 2024(15)

54

MEGALOPOLIS

Maersk

2013

4,957

13,500

July 2025(16)

55

MARATHOPOLIS

Maersk

2013

4,957

13,500

July 2025(16)

56

OAKLAND

Maersk

2000

4,890

24,500

March 2023

57

GIALOVA

ZIM

2009

4,578

25,500

April 2024

58

NORFOLK

Maersk

2009

4,259

30,000

May 2023

59

VULPECULA

OOCL

2010

4,258

22,700

February 2023

60

VOLANS

ZIM

2010

4,258

24,250

April 2024

61

VIRGO

Maersk

2009

4,258

30,200

February 2024

62

VELA

OOCL

2009

4,258

22,700

January 2023

63

ANDROUSA

Maersk

2010

4,256

22,750

May 2023

64

NEOKASTRO

(*)/CMA CGM

2011

4,178

(*)/ 39,000

January 2027(17)

65

ULSAN

Maersk

2002

4,132

34,730

January 2026

66

POLAR ARGENTINA(i)(ii)

Maersk

2018

3,800

19,700

October 2024

67

POLAR BRASIL(i)(ii)

Maersk

2018

3,800

19,700

January 2025

68

LAKONIA

COSCO

2004

2,586

26,500

March 2025(18)

69

SCORPIUS

Hapag Lloyd

2007

2,572

17,750

January 2023

70

ETOILE

(*)

2005

2,556

(*)

February 2023

71

AREOPOLIS

COSCO

2000

2,474

26,500

April 2025(19)

72

MONEMVASIA(i)

Maersk

1998

2,472

9,250

November 2022(20)

73

MESSINI

(*)

1997

2,458

18,000

January 2022

74

ARKADIA(i)

China Navigation

2001

1,550

21,500

May 2023

75

MICHIGAN

MSC

2008

1,300

18,700

September 2023

76

TRADER

(*)

2008

1,300

(*)

October 2024

77

LUEBECK

MSC

2001

1,078

15,000

March 2024(21)

Containership agreed to be acquired within 2021

Vessel Name

Vessel Capacity (TEU)

Year Built

Charterer

Agreed Daily Charter Rate (U.S. dollars)

Charter Tenor

1

CO KOBE (tbr. DYROS)

4,578

2008

Maersk

22,750

24.5 – 27.5 months from vessel’s delivery to the charterer


(1)

Daily charter rates are gross, unless stated otherwise. Amounts set out for current daily charter rate are the amounts contained in the charter contracts.

(2)

Charter terms and expiration dates are based on the earliest date charters (unless otherwise noted) could expire.

(3)

Upon redelivery of each vessel from COSCO between April 2022 and July 2022, each vessel will commence a charter for a period of 36 to 39 months at a daily rate of $72,700. Until then the daily charter rate of Cosco Guangzhou and Cosco Ningbo will be $30,900.

(4)

This charter rate will be earned by MSC Azov until December 2, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.

(5)

This charter rate will be earned by MSC Amalfi until March 16, 2024. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.

(6)

This charter rate will be earned by MSC Ajaccio until February 1, 2024. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.

(7)

This charter rate will be earned by MSC Athens until January 29, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.

(8)

This charter rate will be earned by MSC Athos until February 24, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300.

(9)

The daily rate of each of Maersk Kleven and Maersk Kotka is a base rate of $17,000, adjusted pursuant to the terms of a 50:50 profit/loss sharing mechanism based on market conditions with a minimum charter rate of $12,000 and a maximum charter rate of $25,000.

(10)

Charterer has the option to extend the current time charter from June 2022, for a period expiring between August 2025 and November 2025 at a daily rate of $18,500.

(11)

Upon redelivery of MSC Methoni from MSC (expected in November 2021), the vessel will commence a charter with Maersk at a daily rate of $46,500. Until then the daily charter rate will be $29,000.

(12)

Upon redelivery of Kobe from RCL Feeder (expected in November 2021), the vessel will commence a charter with ZIM at a daily rate of $45,000. Until then the daily charter rate will be $14,500.

(13)

The daily rate for Sealand Washington, Sealand Michigan, Sealand Illinois, Maersk Kolkata, Maersk Kingston and Maersk Kalamata is a base rate of $16,000, adjusted pursuant to the terms of a 50:50 profit/loss sharing mechanism based on market conditions with a minimum charter rate of $12,000 and a maximum charter rate of $25,000. Expiration of charter represents latest redelivery date.

(14)

Upon redelivery of Glen Canyon from ONE (expected between February 2022 and April 2022), the vessel will commence a charter with ZIM at a daily rate of $62,500.

(15)

Charterer has the option to extend the current time charter for an additional period of 12 to 14 months at a daily rate of $17,000.

(16)

Charterer has the option to extend the current time charter for an additional period of approximately 24 months at a daily rate of $14,500.

(17)

Upon redelivery of Neokastro from her current charterer (expected between December 2021 and February 2022), the vessel will commence a charter with CMA CGM at a daily rate of $39,000.

(18)

This charter rate will be earned by Lakonia from April 24, 2022. Until then the daily charter rate will be $17,300.

(19)

This charter rate will be earned by Areopolis from May 3, 2022. Until then the daily charter rate will be $17,300.

(20)

Expiration of charter represents latest redelivery date.

(21)

This charter rate will be earned by Luebeck from March 19, 2022. Until then the daily charter rate will be $7,750.

(i)

Denotes vessels acquired pursuant to the Framework Deed. The Company holds an equity interest of 49% in each of the vessel-owning entities.

(ii)

Denotes vessels subject to a sale and leaseback transaction.

(iii)

Denotes vessels that we have agreed to sell.

(*)

Denotes charterer’s identity and/or current daily charter rates and/or charter expiration dates, which are treated as confidential.

The tables below provide additional information, as of October 26, 2021, about our fleet of dry bulk vessels, including the vessels that we have agreed to acquire.

Vessel Name

Year Built

Capacity (DWT)

Current Daily Charter Rate(1) (U.S. dollars)

Expiration of Charter(2)

1

AEOLIAN

2012

83,478

39,000

December 2021

2

BUILDER

2012

81,541

25,000

November 2021

3

FARMER

2012

81,541

38,300

December 2021

4

SAUVAN

2010

79,700

30,250

November 2021

5

ROSE

2008

76,619

-

Open

6

SEABIRD

2016

63,553

40,750

November 2021

7

DAWN

2018

63,530

10,500

December 2021(3) (4)

8

ERACLE

2012

58,018

30,000

November 2021

9

CURACAO

2011

57,937

39,000

December 2021

10

URUGUAY

2011

57,937

35,000

November 2021

11

ATHENA

2012

57,809

35,000

November 2021

12

THUNDER

2009

57,334

40,750

October 2021

13

SERENA

2010

57,266

98.25% participation to the BSI58 performance(5)

May 2022

14

PEGASUS

2011

56,726

26,150

November 2021

15

MERIDA

2012

56,670

42,000

November 2021

16

CLARA

2008

56,557

47,000

November 2021

17

PEACE

2006

55,709

98.5% participation to the BSI58 performance(5)

July 2022

18

PRIDE

2006

55,705

34,500

November 2021

19

COMITY

2010

37,302

100% participation to the BHSI38 performance(6)

July 2022(3)

20

VERITY

2012

37,163

100% participation to the BHSI38 performance(6)

March 2022(3)

21

PARITY

2012

37,152

102% participation to the BHSI38 performance(6)

December 2022

22

ACUITY

2011

37,149

30,900

November 2021

23

EQUITY

2013

37,071

32,500

November 2021

24

DISCOVERY

2012

37,019

47,000

November 2021

25

TAIBO

2011

35,112

-

Vessel in dry dock

26

BERNIS

2011

34,627

25,250

November 2021

27

MANZANILLO

2010

34,426

48,750

November 2021

28

ADVENTURE

2011

33,755

7,500

December 2021(3) (4)

29

ALLIANCE

2012

33,751

8,150

December 2021(3) (4)

30

CHARM

2010

32,527

91% participation to the BHSI38 performance(6)

February 2022(3)

31

PROGRESS

2011

32,400

-

Open

32

MINER

2010

32,300

-

Vessel in dry dock

33

KONSTANTINOS

2012

32,178

19,500

November 2021(3) (4)

34

RESOURCE

2010

31,776

27,500

November 2021

Dry Bulk vessels agreed to be acquired within 2021

Vessel Name

Year Built

Capacity (DWT)

Current Daily Charter Rate(1) (U.S. dollars)

Expiration of Charter(2)

1

JAIGARH (tbr. GRENETA)

2010

82,166

-

-

2

BULK TITAN (tbr. TITAN I)

2009

58,090

-

-

3

DARYA LAKSHMI (tbr. BERMONDI)

2009

55,469

-

-


(1)

Daily charter rates are gross, unless stated otherwise.

(2)

Charter terms and expiration dates are based on the earliest date charters (unless otherwise noted) could expire.

(3)

Vessels acquired/agreed to be acquired, with a time charter agreed by the previous owners.

(4)

Latest redelivery date.

(5)

Gross daily charter rate linked to the Baltic Exchange Supramax Index (“BSI58’’).

(6)

Gross daily charter rate linked to the Baltic Exchange Handysize Index (“BHSI38’’).

Consolidated Statements of Income

(Expressed in thousands of U.S. dollars, except share and per share amounts)

Nine-months ended
September 30,

Three-months ended
September 30,

2020

2021

2020

2021

Unaudited

REVENUES:

Voyage revenue

$

341,176

$

509,721

$

107,903

$

216,226

EXPENSES:

Voyage expenses

(6,383)

(7,480)

(2,380)

(4,409)

Voyage expenses – related parties

(4,753)

(7,339)

(1,623)

(3,038)

Vessels' operating expenses

(84,999)

(119,316)

(30,241)

(49,716)

General and administrative expenses

(5,301)

(5,960)

(1,543)

(2,251)

Management fees - related parties

(16,023)

(19,939)

(5,502)

(8,153)

General and administrative expenses - non-cash component

(2,416)

(5,523)

(908)

(2,316)

Amortization of dry-docking and special survey costs

(6,765)

(7,564)

(2,228)

(2,717)

Depreciation

(81,618)

(96,010)

(25,881)

(37,284)

Gain / (Loss) on sale / disposal of vessels, net

(65,260)

18,075

(432)

16,669

Loss on vessels held for sale

(14,359)

-

-

-

Vessels’ impairment loss

(31,577)

-

-

-

Foreign exchange gains / (losses)

(203)

147

4

1

Operating income

$

21,519

$

258,812

$

37,169

$

123,012

OTHER INCOME / (EXPENSES):

Interest income

$

1,464

$

1,554

$

377

$

65

Interest and finance costs

(51,452)

(60,793)

(16,085)

(24,245)

Swaps’ breakage cost

(6)

-

(6)

-

Income from equity method investments

12,201

12,005

3,960

7,054

Fair value measurement / Change in fair value of equity securities

-

58,144

-

7,050

Dividend income from investment in equity securities

-

1,833

-

1,833

Other

468

3,631

160

648

Loss on derivative instruments

(2,392)

(1,219)

(326)

(207)

Total other income / (expenses)

$

(39,717)

$

15,155

$

(11,920)

$

(7,802)

Net Income / (Loss)

$

(18,198)

$

273,967

$

25,249

$

115,210

Earnings allocated to Preferred Stock

(23,315)

(23,302)

(7,854)

(7,854)

Gain on retirement of Preferred Stock

619

-

-

-

Net Income / (Loss) available to common stockholders

$

(40,894)

$

250,665

$

17,395

$

107,356

Earnings / (Losses) per common share, basic and diluted

$

(0.34)

$

2.04

$

0.14

$

0.87

Weighted average number of shares, basic and diluted

120,319,521

122,845,943

121,094,924

123,299,457

COSTAMARE INC.
Consolidated Balance Sheets

As of December 31,

As of September 30,

(Expressed in thousands of U.S. dollars)

2020

2021

ASSETS

(Audited)

(Unaudited)

CURRENT ASSETS:

Cash and cash equivalents

$

143,922

$

221,358

Restricted cash

4,998

8,789

Accounts receivable

8,249

16,988

Inventories

10,455

18,476

Due from related parties

1,623

-

Fair value of derivatives

460

-

Insurance claims receivable

883

1,216

Asset held for sale

12,416

44,931

Time charter assumed

191

199

Investment in equity securities

-

61,945

Prepayments and other

8,853

7,100

Total current assets

$

192,050

$

381,002

FIXED ASSETS, NET:

Right-of-use assets

$

199,098

$

193,268

Vessels and advances, net

2,450,510

3,517,248

Total fixed assets, net

$

2,649,608

$

3,710,516

NON-CURRENT ASSETS:

Equity method investments

$

78,227

$

19,018

Deferred charges, net

27,682

35,430

Accounts receivable, non-current

3,896

4,876

Restricted cash

42,976

68,211

Fair value of derivatives, non-current

-

468

Time charter assumed, non-current

839

716

Debt securities, held to maturity (Net of allowance for credit losses of $569 as of December 31, 2020)

6,813

-

Other non-current assets

8,425

3,332

Total assets

$

3,010,516

$

4,223,569

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Current portion of long-term debt

$

147,137

$

270,277

Accounts payable

7,582

12,512

Due to related parties

432

2,788

Finance lease liabilities

16,495

16,629

Accrued liabilities

17,621

25,210

Unearned revenue

11,893

16,932

Fair value of derivatives

3,440

8,439

Other current liabilities

2,374

2,519

Total current liabilities

$

206,974

$

355,306

NON-CURRENT LIABILITIES

Long-term debt, net of current portion

$

1,305,076

$

2,149,477

Finance lease liabilities, net of current portion

116,366

103,882

Fair value of derivatives, net of current portion

3,653

5,901

Unearned revenue, net of current portion

29,627

32,797

Total non-current liabilities

$

1,454,722

$

2,292,057

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY:

Preferred stock

$

-

$

-

Common stock

12

12

Additional paid-in capital

1,366,486

1,381,270

Retained earnings / (Accumulated deficit)

(9,721

)

202,306

Accumulated other comprehensive loss

(7,957

)

(7,382

)

Total stockholders’ equity

$

1,348,820

$

1,576,206

Total liabilities and stockholders’ equity

$

3,010,516

$

4,223,569


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