Business Context and Reporting Period
This Form 6-K filing by Costamare Inc. (NYSE: CMRE) is dated May 10, 2011. The report details significant fleet expansion activities, including the signing of shipbuilding contracts for five newbuild containerships, new chartering agreements for existing vessels, and the completion of financing for two previously contracted newbuilds. The Company operates as a leading owner and provider of containerships with a fleet of 58 vessels totaling approximately 320,000 TEU.
Key Financial Metrics and Transactions
The filing focuses on transactional data rather than period-end financial statements. Key metrics include:
- Newbuild Orders: Five Post-Panamax containerships (approx. 8,800 TEU each) ordered from Sungdong Shipbuilding. Expected delivery: Q1-Q3 2013.
- Charter Rates (Newbuilds): Daily rates and contract prices are similar to January 2011 agreements: approx. $95 million per vessel and $43,000 per day for 10-year charters with the Evergreen Group.
- Financing: Financing finalized for two previously contracted newbuilds (delivery end of 2012) with a major European financial institution. The five new orders are expected to be financed via cash from operations and new credit facilities, without using currently committed credit lines.
- Existing Fleet Charters: Seven charter agreements secured for vessels in the water with daily rates ranging from $7,500 to $19,400.
- Historical Investment: Management notes total investment exceeding $1 billion in 10 newbuild and 10 secondhand containerships since going public.
Material Changes and Fleet Activity
The filing highlights a material expansion of the order book and fleet utilization:
- Fleet Growth: Addition of five newbuilds to the order book, bringing the total newbuilds on order to 10 vessels (approx. 90,000 TEU).
- Charter Secured: All five newbuilds are chartered immediately upon delivery to members of the Evergreen Group. Two previously contracted vessels are chartered to Mediterranean Shipping Company S.A. (MSC).
- Short-term Utilization: Seven existing vessels were chartered or re-chartered for periods ranging from 6 to 27 months, securing revenue for the near term.
Guidance, Outlook, and Management Commentary
Management commentary indicates a positive outlook driven by favorable market conditions post-Chinese New Year.
- Strategy Execution: CEO Konstantinos V. Konstantakopoulos stated the Company has successfully executed its growth strategy by investing at an "attractive point in the cycle."
- Market Conditions: Vessels are being chartered at favorable rates, and newbuild orders are backed by "first class charterers."
- Future Goals: The Company aims to create shareholder value by prudently growing the fleet and increasing dividends consistent with its policy.
- Risks: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ materially due to inherent uncertainties and factors outside the Company's control. Specific risk factors are referenced in the Annual Report on Form 20-F.
Investor Verification Checklist
- Verify the specific terms of the new credit facilities intended to finance the five newbuilds.
- Confirm the delivery schedule for the five newbuilds (Q1-Q3 2013) and the two previously contracted vessels (end of 2012).
- Review the creditworthiness and financial stability of the charterers (Evergreen Group and MSC) given the long-term nature of the agreements.
- Assess the impact of the $1 billion+ historical investment on the Company's leverage ratios and liquidity position.
- Monitor the actual daily charter rates achieved for the existing fleet against the rates cited in this filing to gauge market trends.