Limassol, Cyprus - May 9, 2022
Castor Maritime Inc. (NASDAQ: CTRM) (“Castor” or the “Company”), a diversified global shipping company, today announced its results for the three months ended March 31, 2022.
Highlights of the First Quarter Ended March 31, 2022:
• Revenues, net: $54.6 million for the three months ended March 31, 2022, as compared to $7.0 million for the three months ended March 31, 2021;
• Net income: $20.0 million for the three months ended March 31, 2022, as compared to $1.1 million for the three months ended March 31, 2021;
• Earnings per common share(1): $0.21 earnings per share for the three months ended March 31, 2022, as compared to earnings per share of $0.02 for the three months ended March 31, 2021;
• EBITDA(2): $27.9 million for the three months ended March 31, 2022, as compared to $2.6 million for the three months ended March 31, 2021; and
• Cash and restricted cash of $84.0 million as of March 31, 2022, as compared to $43.4 million as of December 31, 2021.
(1) All comparative share and per share amounts disclosed throughout this press release and in the financial information presented in Appendix B have been retroactively updated to reflect the one-for-ten (1-for-10) reverse stock split effected on May 28, 2021.
(2) EBITDA is not a recognized measure under United States generally accepted accounting principles (“U.S. GAAP”). Please refer to Appendix B for the definition and reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Mr. Petros Panagiotidis, Chief Executive Officer of Castor commented: “In the first quarter of 2022 we enjoyed for the first time the full contribution to quarterly earnings of all the vessels acquired during 2021. In addition, we benefited from a robust dry bulk market as well as from the recovery in the charter rates of our Aframax/LR2 vessels, resulting in our best quarter to date, with Net income of $20 million and strong operating cash flows. Our balance sheet is strong with a healthy liquidity position and low leverage.
We did not sell any common shares under the ATM Program during the first quarter and up to the date of this release, at the same time, we resized our ATM Program from $300 million to $150 million on March 31, 2022. We will continue to seek attractive acquisition opportunities across the shipping space to further pursue Castor’s growth trajectory.
First Quarter ended March 31, 2022, and 2021 Results
Vessel revenues, net of charterers’ commissions, for the three months ended March 31, 2022, increased to $54.6 million from $7.0 million in the same period of 2021. This increase was largely driven by the increase in our Available Days (defined below) from 615 in the three months ended March 31, 2021, to 2,606 in the three months ended March 31, 2022, following the acquisition and delivery to our fleet of 18 vessels since March 31, 2021. The increase in vessel revenues during the three months ended March 31, 2022, as compared with the same period of 2021 was further underpinned by the healthy dry bulk shipping market. The increase in voyage expenses, from a net gain of $0.4 million in the three months ended March 31, 2021, to expenses of $8.2 million in the same period of 2022, is mainly associated with (i) increased port expenses and bunkers consumption expenses as a result of having certain of our tanker vessels operating under voyage charters in the first quarter of 2022 (as opposed to none of our tankers operating under voyage charters during the first quarter of 2021), and (ii) increased brokerage commission expenses, corresponding to the increase in vessel revenues discussed above.
The increase in vessel operating expenses by $12.1 million, from $3.3 million in the three months ended March 31, 2021 to $15.4 million in the same period of 2022, as well as the increase in vessels’ depreciation and amortization costs by $5.0 million, from $1.1 million in the three months ended March 31, 2021 to 6.1 million in the same period of 2022, mainly reflect the increase in our Ownership Days following the expansionof our fleet.
General and administrative expenses in the three months ended March 31, 2022, amounted to $0.9 million, whereas, in the same period of 2021 general and administrative expenses totaled $0.7 million. This increase stemmed from higher corporate fees primarily due to the growth of our company.
Management fees in the three months ended March 31, 2022, amounted to $2.2 million, whereas, in the same period of 2021 management fees totaled $0.8 million. This increase in management fees is due to the substantial increase in our Ownership Days for which our managers charge us with a daily management fee, following the acquisitions discussed above.
During the three months ended March 31, 2022, we incurred net interest costs and finance costs amounting to $1.6 million compared to $0.4 million during the same period in 2021. The increase is mainly due to our higher level of weighted average indebtedness during the three months ended March 31, 2022, as compared with the same period of 2021.
Recent Financial and Business Developments Commentary:
In connection with our ongoing at-the-market common stock offering program (“ATM Program”), on March 31, 2022, we entered into an amended and restated equity distribution agreement with the agent under the ATM Program (the “Equity Distribution Agreement”). Under the Equity Distribution Agreement, until June 14, 2022, we may, from time to time, offer and sell our common shares through the ATM Program, having an aggregate offering price of up to $150.0 million. In connection with the ATM Program, from June 15, 2021, through to December 31, 2021, we had raised net proceeds of $12.4 million by issuing and selling 4,654,240 common shares, after sales commissions and other offering expenses paid of $0.5 million, at an average price per share of $2.76.
From January 1, 2022 to date, no sales of common shares have taken place under the ATM Program, and there have been no subsequent warrant exercises under our currently effective warrant schemes. As of May 6, 2022, we had issued and outstanding 94,610,088 common shares.
Cash Flow update
Our consolidated cash position as of March 31, 2022, increased by $40.6 million, to $84.0 million, as compared with our cash position on December 31, 2021. During the three-month period ended March 31, 2022, our cash position improved mainly as a result of: (i) $13.1 million of net operating cash flows generated, and (ii) net cash inflows of approximately $54.3 million following our entry into one secured loan facility in January of 2022. From these amounts, during the three months ended March 31, 2022, we used $22.5 million to fund the acquisition of the M/V Magic Callisto and other capital expenditures of our fleet, whereas, $4.3 million were used for scheduled principal repayments of our debt.
As of March 31, 2022, our total debt, gross of unamortized deferred loan fees, was $154.5 million of which $30.7 million is repayable within one year, as compared to $103.8 million of gross total debt as of December 31, 2021.
Sale of the M/T Wonder Arcturus
On May 2, 2022, we entered into an agreement with a third party for the sale of the M/T Wonder Arcturus at a price of $13.15 million. The conclusion of the sale agreement is subject to the execution of definitive documentation customary for this type of transaction. The vessel is expected to be delivered to its new owner during the second quarter of 2022. The Company expects to record during the second quarter of 2022 a net gain on the sale of the M/T Wonder Arcturus of approximately $3.8 million, excluding any transaction related costs.
New employment agreements
On April 28, 2022, the M/V Magic Vela commenced a time charter contract at a gross daily charter rate equal to 87.5% of the average of Baltic Panamax Index 5TC routes (“BPI5TC”) (1). The charter has a minimum duration of twelve months and a maximum duration of fifteen months at the charterer’s option.
On April 29, 2022, the M/V Magic P commenced a time charter contract at a gross daily charter rate of $25,000. The charter has a minimum duration until September 1, 2022, and a maximum duration until October 15, 2022.
On May 2, 2022, the M/V Magic Moon was fixed on a time charter contract at a gross daily charter rate of $20,500. The charter is expected to commence on or around May 13, 2022, and will have a duration of about 25 days.
(1) The benchmark vessel used in the calculation of the average of the Baltic Panamax Index (“BPI”) 5TC routes is a non-scrubber fitted 82,500mt dwt vessel (Kamsarmax) with specific age, speed - consumption, and design characteristics.
Castor Maritime press release