Greek container ship operator Costamare is anticipating a “deferred built-in demand” in the economy following the end of the lockdown in the US and Europe by increasing the number of vessels in its fleet.
In preparation for this upturn the company had taken on a number of newly acquired vessels and refinanced loans. In its first-quarter statement the company said it had taken on US$165 million in new loans to finance the acquisition of new vessels and the refinancing of existing loans.
Costamare announced to investors that it had spent US$30 million on four sisterships of 4,258TEU each, they were the 2010-built Vulpecula, 2010-built Volans, 2009-built Vela and 2009-built JPO Virgo.
The company also refinanced the loan pertaining to its existing vessel the 2016-built, 11,010TEU containership Cape Akritas, which is co-owned under Costamare’s joint venture with York. The company said the new facility will be repayable over five years.
In addition, the company said it has refinanced US$70.0 million in two loan facilities “originally maturing in 2021 (balloon payments of US$54.3 million). The refinancing is expected to be completed in May 2020 and the new facility will mature in 2025.”
All the new loans and refinancing deals have been agreed with what Costamare calls a European financial institution.
Gregory Zikos, Chief Financial Officer of Costamare said the Covid-19 pandemic has “adversely impacted the international container shipping industry”. However, he pointed out that the situation was rapidly evolving and was “difficult to predict ultimate severity and long-term impact” of the crisis.
However, Zikoswent on to say, “Determining the timing and shape of the recovery is a challenge, yet it is worth noting that the protective measures adopted across the world are intended to be temporary, and we believe that the restrictions enforced are also creating a deferred built-in demand.”
In spite of the difficulties experienced during the Covid-19 crisis Costamare has managed to increase its revenues to US$121.4 million, from US$113 million in Q1 last year and seen its net income for the quarter increase from a US$1.7 million loss to US$32.8 million profit, in part due to the decrease in vessel operating costs, a decrease in interest payments and savings on vessel sales losses.
The Greece-based vessel owner operates 70 vessels of between 14,424TEU and 1,078TEU, with a further five 12,690TEU ships on order from China’s Jiangsu Yangzijiang Shipbuilding Group for delivery from Q3 2020 into the first half of next year. All five vessels will be chartered to the Taiwan operator Yang Ming.
Nick Savvides
Managing Editor
