Thank you for standing by, ladies and gentlemen, and welcome to the Costamare Bulkers Holdings Limited Virtual Analyst and Investor Day. We have with us in the incoming management team of Costamare Bulkers Holdings Limited is Mr. Gregory Zikos, Chief Executive Officer and member of the Board of Directors of Costamare Bulkers; Jens Jacobsen, Chief Commercial Officer and member of the Board of Directors of Costamare Bulkers; and Demetrios Pagratis, Chief Financial Officer of Costamare Bulkers. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. At which time, if you wish to ask a question, you may press star then one on your telephone keypad and wait for your name to be announced. I must advise you that this conference call is being recorded today, Wednesday, April 9th, 2025.
We would like to remind you that this conference call contains forward-looking statements that involve risk and uncertainties and other factors that may cause the actual results to materially be different from any future results expressed or implied by such forward-looking statements. Please refer to the company's registration statement on Form 20-F for a discussion of factors that could cause the company's actual results to differ materially from those expectations. Please take a moment to read slide number two of the presentation, which contains the forward-looking statements. I would now like to pass the floor over to your speakers, Mr. Zikos, Mr. Jacobsen, and Mr. Pagratis. Please go ahead, gentlemen.
Thank you and good morning, ladies and gentlemen, and thank you for dialing in this morning in our investors' and analyst call. I'm sure there will be a lot of questions today, especially on the latest developments. Now, let me start with slide six, which summarizes the deal. Quite simply, Costamare Inc. is spinning off its dry bulk business, consisting of the ownership of 38 dry bulk vessels as well as the dry bulk operating platform. The remaining Costamare Inc. will own the current 68 container ships and also will continue to hold its controlling interest in Neptune Maritime Leasing. Costamare Bulkers will be an independent company owning 38 dry vessels and having chartered- in 48 additional dry ships. In a nutshell, the spin-off creates two pure-play owners and operators in the container ship and dry sector.
Moving on to the next slide, what is the strategic rationale for the above? As summarized in slide seven, its listed entity can pursue distinct operating priorities and initiatives. There are unique opportunities presented in its sector. Shareholders can also invest in pure-play entities. Capital structure is optimized as per the characteristics of its business. Finally, corporate structure becomes more simple and efficient. Let's move to section two on overview and strategy. On slide nine, we discuss our history. The founding family are shareholders with about 63%. They have a rich history in shipping of over 50 years. As you can see on the right-hand side, the Constantakopoulos family entered shipping in 1974, and Costamare Inc. is listed since November 2010. We have built over those decades strong and valuable relations with charterers, brokers, shipyards, financial institutions. The sponsorship of the Costamare brand has a unique value.
Moving on to the next slide, slide 10. Here, you can see a snapshot of the company. Strong sponsor support ensuring alignment of interests. Eighty-six dry vessels in total representing six different countries, blue-chip customer base, and access to a diverse range of cargoes. As you can see, iron ore and Australian trade are the majority of cargo mix and geographical distribution due to the current operating platform focusing on the Capesize trades. What are the advantages of the dual owner-operator model? Slide 11. This mainly relates to enhanced commercial flexibility, synergies, access to large cargoes leading to higher utilization, flexibility in mitigating long positions from the ownership of the vessels by taking counter-short positions in the trading platform, flexibility to optimize the positioning of the fleet and to take advantage of geographical dislocations, and overall, the ability to de-risk the business.
On the left-hand side of the slide, we summarize the characteristics of the owned fleet and of CBI separately. Starting from the owned fleet, this consists of 38 vessels across all sizes. The levels stand at low levels, decreasing break-even levels and also affording commercial flexibility. The ships are mainly deployed on index with the option to convert, providing potential upside in a rising market. The operating platform, at the same time, can take directional positions in the market, chartering vessels to a mix of short, medium, and long-term charters. The assets chartering can be employed through a combination of voyage charters, COAs, and time charter relays. Finally, the optionality to extend time charters with option periods provides further upside potential. CBI has a total of 48 ships chartering with a deadweight capacity of close to 8 million tons.
Slide 12 provides a brief history of the evolution of the Costamare investment in the dry sector. The initial decision was taken in 2021 when we bought 45 vessels through timely acquisitions. We were initially focused on smaller sizes, ranging from Handys to Supramaxes . Starting from 2023, we took the decision to migrate towards larger sizes, selling smaller ships and opportunistically replacing them with Capes. As you can see today, we own a fleet of 38 ships, including six Capes and six Handysize vessels, versus 16 Handys initially parceled and no Capes. Our goal is to grow the company on a healthy basis through aggressive acquisitions that finally will enhance shareholder value. Moving to slide 13. Slide 13 depicts the brief history of CBI from 2022 onwards and its geographical access. The platform was established in 2022, and its book of chartering fleet expanded throughout 2023.
During the last quarter of 2024, there was a change in management, and new priorities were set. Emphasis is now on risk management and on achieving balanced growth through a healthy book. The platform has offices in Athens and Monaco, as well as agencies in Singapore, Hamburg, Copenhagen, and Tokyo. Singapore is focused on cargo sourcing and operations, mainly relating to the Pacific, as well as on the provision of banking, research, and performance monitoring. Copenhagen and Hamburg are focused on chartering of vessels, as well as on cargo sourcing, S&P operations, and business analytics. The Tokyo office provides S&P and operation services. What is then our strategy?
Moving to the next slide, very simply, on the owned fleet to maximize returns, focusing on indexing charters with conversion options, to manage the fleet efficiently, to migrate towards larger tonnage when market conditions justify that, to capitalize on the synergies provided by CBI, and finally, to grow but on a healthy basis. On CBI, to focus on risk management, take market position complementing the owned fleet, enhance synergies, and capitalize on in-house research and business analytics capabilities. In the next section, we discuss the NAV leverage, liquidity, and capital allocation thought process. Demetrios will guide you through that, but let me just say a couple of things. Our goal is to have a dry bulk vehicle with all the ingredients in place in order to succeed. Therefore, the remaining company is contributing cash of $100 million. Loans have been reduced by $150 million.
Related party loans of $85 million have been forgiven, and this finally results in minimum leverage of close to 2%. Based on the latest valuation and balance sheet data, the NAV stands at about $800 million. Demetrios?
Thank you, Greg. As Greg already mentioned, moving on to slide 16, the financial consideration sections, we prioritize maintaining a strong balance sheet with low financial leverage. Prior to the spin-off, Costamare will bolster Costamare Bulkers' balance sheet via the cash contribution of $100 million, a prepayment of $150 million of the company's long-term debt, and the reduction of $85 million of the company's related party loans, bringing the respective balance to zero. On top of the $150 million prepayment already mentioned, the company's bank debt has been reduced by approximately $14 million within the first quarter of 2025. The aforementioned actions, in conjunction with an estimated fleet market value of close to $720 million, result in less than 2% financial leverage, as already mentioned by Greg. Moving on to slide 17. This slide presents the company's enhanced value adjusted for Costamare's supporting actions already mentioned in the previous slide.
Our fleet of owned vessels, with an estimated market value of close to $720 million as of end of March 2025, along with a robust liquidity position and very low financial leverage, drives the company's value to approximately $800 million. Moving on to the last slide of this section, and our capital allocation priorities, Costamare Bulkers aims to enhance shareholder returns through two primary strategies. First, by making targeted acquisitions and opportunistic disposals in its owned fleet, coupled with the implementation of profitable strategies within the CBI trading platform. Second, by returning capital to shareholders subject to board approval while simultaneously maintaining prudent financial management. Now I pass the floor to Jens.
Thank you, Demetrios. Good morning. In Costamare Bulkers, we're active within all four major vessel classes. Capesize, where we see sustained demand, especially due to record exports and a very low new building order book. The Capesize are responsible for 39% of the global deadweight in dry bulk, and the average age of the vessels is only 11 years. The typical cargoes are iron ore, coal, and bauxite. Moving on to the Panamax. Here again, the share of the global deadweight is 25%. The average age is 12 years old. The typical cargoes are coal, grain, bauxite, and iron ore. The new building book is moderate compared to historical levels. Panamax vessels are responsible for 24% of the global deadweight. The average age is 12 years old, and the typical cargoes are iron ore, coal, grain, and minor bulks.
Again, new building book is moderate in historical perspective at 12%. Finally, the Handysizes are responsible for 12% of the global deadweight. Average age is 14 years. Typical cargoes: bauxite, steel products, forest products, agri bulks, and scrap. The new building book is low at around 8%. Now I'll pass the word back to Mr. Gregory Zikos.
Yeah, thank you, Jens. Closing this discussion with the investment highlights and summarizing all above, we do offer an attractive entry point in the sector, especially during today's period. It is an easy structure with a clear market strategy and fully aligned interests between the free float shareholders and the sponsoring family. The ownership of a diverse and also well-maintained asset, combined with the operator, provides synergies and enhanced market access. Low leverage and high liquidity offer protection in a down market and the ability to grow fast in a low asset value environment. This concludes our presentation, and we can now take questions. Thank you. Operator, we can take a question now.
Thank you. As a reminder, if you would like to ask a question, please press star, then one on your telephone keypad, and wait for your name to be announced. If you wish to cancel your request, please press star, then two, and we will pause momentarily to assemble our roster. The first question will come from Christine McGarvey with Morgan Stanley. Please go ahead.
Hey, guys. Good morning. Thanks for the time. Maybe just want to touch on the strategic rationale, seems very clear, but maybe we can talk about why now, what was the impetus here, what makes now the right time to be separating out these businesses. Thanks.
Yeah, I know this is a valid question. First of all, we are not raising equity. So if it was the question whether it is the right time to raise equity or not, probably it is definitely not the right time to do this now, where multiple peers are trading at very low multiples. We feel that going forward, during the remaining of 2025 and beyond that, having two distinct entities, the one focusing on container ships, which is quite big, together with the Neptune Maritime Leasing, and the other focusing exclusively on dry bulk vessels, both owned and chartering vessels through the operator, makes sense, and it will unlock hidden value in the Costamare today. We have the platform in place. There was a change in management. The focus is on risk management and efficiency. The 38 owned vessels do provide a well-maintained and also diverse fleet.
At the same time, the containers, which is, again, shipping, but it's a completely different business, focusing on contracted cash flows with some liner operators with much more visibility compared to the dry bulk vessels. It is two distinct businesses. There is a lot of hidden value, which is not now reflected in the valuation and also in the balance sheet of Costamare. We feel it is the right choice. We hadn't timed it to coincide with the imposition of those tariffs. Even if we had tried to, probably we wouldn't have managed it. Since we're not raising equity, and this is a strategic decision and not a short-term play, we feel that it is the right decision to move ahead.
Very clear. Thanks. Appreciate that. If I can sneak in one more, and you just touched on this a little bit with maybe some of the lower multiples of peers. You talked about acquisitions as part of your strategy. Can you just expand a little bit more on that and sort of the balance between what might be some attractive opportunities at the moment versus clearly wanting to keep the leverage within reasonable range and how you're going to plan to balance that in the near term?
Yeah. If I understood the question correctly, I mean, we know that dry bulk companies today are trading at a discount. This is something we know, and I think this has been more or less the norm in shipping in general, but much more now. What sort of Costamare Bulkers has is that, as you rightly pointed out, it is a low leverage, which on a net debt basis is slightly below 2%. Valuation of fleet still at lower levels compared to where values were some months ago. At the same time, we do not assign any value at all in this NAV to the trading platform, which it is expected to provide a lot of synergies. Overall, we view it as a compelling proposal in a low multiples valuation environment.
Very helpful. Thanks. Appreciate the time.
The next question will come from Nils Thommesen with Fearnley Securities. Please go ahead.
Hi. Good morning, guys. Just a quick question on the growth strategy. Do we understand you correctly that it's mainly Capesize larger vessels that is the strategy? With where asset values are currently, do you think that these levels are attractive in themselves, or are you likely going to be on the sideline a bit more before increasing activity on the growth side there?
Yeah. For Capes, particularly, I mean, for example, new building prices for Capes for us today, they do not make sense. Also, second-hand prices, we do not feel that they have corrected compared to the volatility that the Capes have seen over the last months. We have bought some Capes 10 to 15 years old over the last quarters. We look for opportunities. Of course, we have to be quite careful on the entry level. For the moment, we may sit and wait. We have the luxury of doing this. Plus, we are not going to be growing for the sake of growth. We are going to be growing only if we feel that acquisition prices and the earnings potential of those assets make sense. For the time being, we sit and wait. Definitely, we monitor the market. We may be inspecting vessels, but we are not rushing.
A question on the market. There's a lot of volatility out there now with tariffs being announced, and what becomes the final outcome is still unclear. Do you see some parts of the dry bulk trade that can benefit from the increased tariffs that are being thrown around there?
This question is going to be directed to Jens, the Chief Commercial Officer. I think he would respond.
Yeah. Hi, good morning. As mentioned previously, we're active in all four major vessel classes, and there's quite a difference between the classes. If you take Cape as an example, there's more than 2 billion tons of seaborne trade, but only around 4 million tons are impacted by the tariffs. On Panamaxes, there's about 1.7 billion tons of seaborne trade, and around 61 million tons are impacted by the tariffs. Further on to the Handymaxes, there's 1.2 billion tons of seaborne trade, and around 70 million tons are impacted by the tariffs. Lastly, on the Handysizes, there's around 800 million tons of yearly seaborne trade, and 47 million tons are impacted by the tariffs. Especially on Cape, we see the impact as minimal and the same on Panamaxes on physical trade.
Yeah, that's helpful. Yeah, great. And then just the final question in terms of dividends. Should we expect over time a fixed dividend policy as you have in sort of the legacy Costamare, or are you thinking a bit differently about that here in the Costamare Bulkers platform?
Okay. This call is about Costamare Bulkers, but I have to make a parenthesis that Costamare, the container ship company, or like Costamare as a whole, as of today, it has been paying $0.115 per share per quarter. The containers do have contracted cash flows with major liners, which is something which do afford a lot of visibility. The dry bulk sector, especially today when you do not have a lot of fixed cover and probably you should not have all your fleet fixed, is much more volatile. We like dividends. We are going to be receiving 63% of the total dividend outflows as insiders. We have fully aligned interests. However, dividends should be coming together with profitability and with also increased cash flow.
Also, from a capital allocation perspective, we feel that it makes sense to pay dividends rather than allocating some equity for new acquisitions, which may or may not make sense. We do not expect it to be a fixed dividend because I do not think this would mirror the dry bulk vessels' operating environment today.
That's very clear. Thank you for the time.
Thank you.
Again, if you have a question, please press star, then one. Our next question will come from Poe Fratt with Alliance Global Partners. Please go ahead.
Greetings. I have several questions. First, I'd like to compliment your efficiency in running through the presentation. The first question I have is, I haven't seen the ratio as far as what Costamare shareholders will receive in the spin-off. Also, can you address the timing and any regulatory approvals that you might need?
Yeah. Good morning. First of all, the ratio of how many Costamare Bulkers shares each current shareholder of Costamare will be receiving is not fixed yet. This is something that is going to be fixed eventually right before completion. There may be a range of ratios we are now discussing, but regrettably, I'm not prepared to give you the final ratio because it's not yet decided. Now, regarding regulatory permissions, I mean, one of the outstanding things that need to be done is the final approval of the 20-F prospectus of CMDB, Costamare Dry Bulkers, by the SEC, which is still pending, and we are in the process of having this in place. This is the main regulatory approval. There are some other documents that are currently being drafted, but this is more like nothing that I think that would hold us back.
However, I have to say that from our side, there is no commitment that this sort of transaction is going to be completed within a specific time frame. We are working in order to have the option to have this concluded soonest. I have to repeat myself again without any commitment from our side.
Great. That's helpful. Can you talk about your chartering and strategy? Do you think that a 48 chartered-in book is sort of what we should expect going forward, or will it wax and wane? I noticed that it looks like five of your own vessels or own dry bulkers are chartered into the CBI. Are you really running a fleet that's a little bit lower than 38 plus 48?
Yeah. Jens, it's going to take this.
Yeah. Hi, good morning. We will look at it opportunistically. If the market dictates that we will reduce the fleet, we will do so. If we see good opportunity, we might expand it further. It will really be down to sort of market opportunities and volatility. We do not have any sort of pre-agreed goal for growth just for the sake of growth. It is correct that at the moment, we have five ships on charter from Costamare Inc. to Costamare Bulkers.
Okay. If I could just one last one, you talked about operating costs, but I didn't hear any specific numbers. Would you mind giving us your operating costs per day plus what you think G&A costs will be going forward?
Yeah. These are going to be part of the 20-F document, which is going to be soon available. I'm afraid I cannot be discussing this now, but it's going to be all quite transparent. All someone has to do is go to the income statement and divide total operating expenses by the ownership days, and they come up with a number which is going to be reflecting the daily operating expenses, excluding the management fees, which are going to be on a different line item. I'm afraid I cannot give you the final number as of now, but you will have it eventually.
Okay. I apologize if I may squeeze in one more. It looks like you've agreed to sell the ROSE, the Panamax, the ROSE Panamax. Can you highlight the sales price and then whether that will flow to the parent or the spinoff?
Yeah. This is, again, I'm afraid this is something we cannot disclose because, I mean, we're going to have to disclose it together with the 20-F and with future press releases to all shareholders at the same time. We cannot be selectively disclosing this now. We are restricted. I mean, yes, in our latest press release, you can, I mean, we have discussed about the ROSE being the Panamax being disposed of. Regarding actual purchase price and delivery of the vessel to the buyers and when this will happen or whether it happened or not, I'm afraid I have to restrict myself to the latest press release we issued.
Great. Thanks for your time.
Sure. Thank you.
Again, if you have a question, please press star, then one. This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead, gentlemen.
Thank you very much for dialing in today and for your interest in the new entity of Costamare Bulkers Holdings Limited. We're looking forward to speaking with you again soon during our next quarterly results. Thank you. Operator, we are finished.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.